My question involves judgment recovery in the State of: Multiple states, please see below.
I have a purely hypothetical question at this post of time (but we will be moving soon and this may become a concern sometime in the future).
We made multiple attempts to short sell our California primary residence that has three purchase money loans on it (piggy back second and third interest only to make mortgage affordable). Since Bank No. 2 (which owns Loans 2 & 3) would not cooperate, we have made the painful yet conscious decision to let the house go into foreclosure. I am told that since my loans are purchase money, the bank will most likely write it off but I'm scared that I may be wrong or mis-informed and am preparing for the worst case scenario which is that I am sued for deficiency post-foreclosure.
Post foreclosure, we will be relocating to TX. My two questions is as follows:
Scenario No. 1. I'm given to understand that Bank No. 2 (the original creditor for Loans No. 2 & 3) will be able to sue me anywhere and everywhere with respect to their loans, regardless of my domicility at that point of time. Basically they could choose to sue me in a local California court, even if I'm in TX then, without any problems. Right?
Scenario No. 2. Say the bank sells these loans to a debt collector for pennies on the dollar. I was told that a Collection Agency -- not being the original creditor -- will *only* be able to sue me over this debt in the county of my residence. Is this true? Or will the agency be able to sue me in CA, since that is there the debt "originated", or can they sue me wherever they operate their business out of -- say NY, for example?
My other question is:
Say the lender or the collection agency did, in fact, sue me in CA, and won a deficiency. We do not have much assets but will each have steady paychecks. CA law permits wage garnishments but TX law does not. My question is, which law will stand if I am living in TX -- will CA law stand and will the creditor be able to garnish my wages even though local state law does not permit it?
I am just completely and utterly confused and any assistance / advise is gratefully accepted.
Please advise. Thank you in advance for your time and feedback. We're basically losing the shirts off our backs and are paying for our stupidity. All I can say is that we've learned an important, valuable albeit a very bitter life experience. This too will pass.