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  1. #1
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    Oct 2014
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    Default Moving with Judgment Liens

    My question involves collection proceedings in the State of: South Carolina

    I am looking for a job and may have to move for one. But there are three judgments against me for about $5,000 each owed to two creditors. I have an estimated $25,000 equity in my half of the house which I own as TIC with my spouse.

    One of the two creditors is offering to settle one of the $5,000 debts for less than $2,000.

    I can't afford that right now. But if I get a better job out of state, could I move, settle, remove the liens, and then rent the house out? Or would they foreclose on the liens before I could do that?

    And am I obligated to tell them if I move? If so, how soon?

  2. #2
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    Default Re: Moving with Judgment Liens

    You don't have to tell the creditors that you move, but you want to ensure that you get your mail. Having it sent to an address where you no longer live would be a problem. And if you keep the property and rent it out you really don't want the renters getting your collection bills. So if you don't tell the creditors you move, at least give them a PO box or some other address where you will get your mail.

    As for the creditors foreclosing on your home, that's not going to happen with the information you provided. South Carolina exempts $59,100 of your home equity (meaning the vale of the home less what you owe on the mortgage) from attachment by judgment creditors. Since the total equity in your house is about $50,000 (taking both you and your wife's interests together) there just isn't enough equity there for the the judgment creditors to get anything if they foreclosed.

    If you sell it, though, the buyers will insist that the liens on the home be cleared as part of the sale, so you can't rely on the exemption to help you in that circumstance.

  3. #3
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    Default Re: Moving with Judgment Liens

    Quote Quoting Taxing Matters
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    South Carolina exempts $59,100 of your home equity (meaning the vale of the home less what you owe on the mortgage) from attachment by judgment creditors.

    Isn't this only true if it's my primary residence? If I move, wouldn't I lose this protection?

  4. #4
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    Default Re: Moving with Judgment Liens

    Quote Quoting ransomedbyfire
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    Isn't this only true if it's my primary residence? If I move, wouldn't I lose this protection?
    You have to use the property as a residence to get that exemption. So if you move and rent the place out, you lose that exemption and the lenders could potentially seek to foreclose their liens. The problem for them is that evidently you are the only creditor (your wife is not included on the judgment) as I understand the facts. That leaves just $25,000 of equity to go after, and that assumes that the house sells at fair market value (FMV). But homes rarely sell for FMV at foreclosure sales — they tend to go for significantly less. This means the creditors here would take the risks of spending money to foreclose the lien and potentially not getting much out of it. They could buy the property themselves for the lien interest, but again they have to hope they can sell it for enough to make that worthwhile. So while they could foreclose once you move out, I wouldn't expect necessarily a rush to do it. No guarantees, though, as to what they will do since I don't anything about the creditors you have. If you keep your address with the creditors current you'll know should they foreclose because they must notify you. You could then arrange a regular sale to get the best price, pay off the creditors, and have some cash leftover.

  5. #5
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    Default Re: Moving with Judgment Liens

    Quote Quoting ransomedbyfire
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    if I get a better job out of state, could I move, settle, remove the liens, and then rent the house out?
    The lien does not prevent you from moving or renting the house. If you settle, any settlement should require that the creditor remove the lien.


    Quote Quoting ransomedbyfire
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    And am I obligated to tell them if I move?
    No.

  6. #6
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    Default Re: Moving with Judgment Liens

    Quote Quoting pg1067
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    The lien does not prevent you from moving or renting the house. If you settle, any settlement should require that the creditor remove the lien.

    No.
    So, based on this and what other people have said, it sounds like this could be a viable plan?
    1) Get a job out of town.
    2) Get a PO box.
    3) Contact creditors to settle.
    4) Creditors remove liens after settlement.
    5) Rent the house out.

  7. #7
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    Default Re: Moving with Judgment Liens

    Quote Quoting ransomedbyfire
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    So, based on this and what other people have said, it sounds like this could be a viable plan?
    1) Get a job out of town.
    2) Get a PO box.
    3) Contact creditors to settle.
    4) Creditors remove liens after settlement.
    5) Rent the house out.
    It could work, the biggest unknown being how readily the creditors will be willing to reach a settlement to take less than the full amount owed.

  8. #8
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    Default Re: Moving with Judgment Liens

    I agree with TM. If you want a better-paying job and need to move to make that happen, that's a personal choice. I don't understand what getting a P.O. box has to do with anything. As mentioned, the creditors' willingness to settle on terms you can live with is a huge unknown. Be aware, however, that it's awfully unlikely that any creditor will remove its lien unless you pay in full or agree to a reduced lump-sum payment. As I mentioned previously, your ability to rent the house is unrelated to the settlement of debts (except that, if you rent the house and haven't resolved the debts, the judgment creditors could levy on the rental payments).

  9. #9
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    Oct 2014
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    Default Re: Moving with Judgment Liens

    Quote Quoting pg1067
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    I don't understand what getting a P.O. box has to do with anything.
    It could be a way to avoid announcing to my creditors that I've moved.


    As mentioned, the creditors' willingness to settle on terms you can live with is a huge unknown.
    One creditor who I owe $5,000 has offered to settle for between $1,000-$2,000. Problem is, without a decent job, I can't do that right now. I'm hoping they'd be willing to accept a similar offer once I do get a better job.

    Be aware, however, that it's awfully unlikely that any creditor will remove its lien unless you pay in full or agree to a reduced lump-sum payment.
    That's what I'm hoping to do. It's not ideal, but neither is having to move for work and being forced to sell the house and lose 60% of my equity.

    As I mentioned previously, your ability to rent the house is unrelated to the settlement of debts (except that, if you rent the house and haven't resolved the debts, the judgment creditors could levy on the rental payments).
    I worry that renting the house could mess up my homestead exemption. I Googled, and I can't find anything about SC's laws on rental levies. Do you have any more information about this?

  10. #10
    Join Date
    Oct 2016
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    Default Re: Moving with Judgment Liens

    Quote Quoting ransomedbyfire
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    I worry that renting the house could mess up my homestead exemption. I Googled, and I can't find anything about SC's laws on rental levies. Do you have any more information about this?
    You would lose the exemption if it isn't your home.

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