Legal Question in Real Estate Law in California

Re: Retirement Income

First, the only way your creditors can file "liens" against your home is after they have sued you and obtained a money judgment. Under California law, a "homestead" exemption exists to protect you from your creditors taking everything you have. The amount of your "homestead exemption" depends upon a number of things, including your age, and whether you have minor children in the home, among others. If your creditors obtain a judgment againt you, they conceptually could sell your home to satisfy that judgment. However, that is an extremely expensive and time consumming process. Moreover, unless you have sufficient equity in the house to completely pay off the judgment against you, your creditors are unlikely to try to sell your house. For instance, if you have a piece of property worth $400,000.00, have an "exemption" of $75,000.00, and first deed of trust on the house of $375,000.00, there would not be sufficient equity for the creditor to be able to sell the house.

As far as your pension and social security payments, the law does not permit a creditor to attach social security income, and in some cases pension income.

Re: Retirement Income

First, you should examine the financing on your house to see whether it is optimal under today's rates and today's appraised value. Possibly you should refinance and take out enough equity to pay off your credit cards. It could save you a bunch of interest, and what remains should be tax deductible whereas credit card interest isn't.

However, adding debt against your home is not for everyone. Get impartial advice from a retirement advisor with no stake in your decision other than giving wise advice.

It isn't quite true that judgment followed by a judgment lien is the only way creditors can put a lien on your real property. There are also mechanic's liens, tax liens and, rarely, pre-judgment attachments. Probably not a worry.

Filed homesteads are not especially useful in California, because substantially the same exemption from levy and execution is available automatically under homeowner exemption law. Further, as you probably know, the protection afforded isn't complete; some equity might still be subject to levy and execution to satisfy a judgment.

The bottom line is that the dredit card debt should be paid off. The top rates approach 30% and the bill collection efforts will drive you to distraction, and they may eventually collect.

I think pension funds are exempt from attachment, but not the monthly sums you get from them, at and after payment to you.