My brother has an Abstract of Judgement recorded against him for $13k for credit card debt that he never paid off. I discovered it when I looked up his name at the Los Angeles County recorder's office. The judgement was recorded in December of 2008. He has no means to pay this judgement off...
In December of 2003, he Quit Claimed a house that he owned (with approx $50k of equity in it) to me because he could not afford the mortgage payments. I did not pay him any money for the equity. I subsequently refinanced the house in my name and have been making payments on the mortgage for the last 10 years.
I am planning on selling the house shortly.. 2 questions:
1. Can my brother's Abstract of Judgement (recorded in December 2008) create a lien on my house (which was quit claimed to me in December 2003)?
2. If my brother receives future judgements against him for other unpaid debt, can they go after me or my house in any way?
2 Answers from Attorneys
Is the Judgment recorded as a lien against your house?
Since he quit claimed it to you 5 years prior to the abstract, the transfer is probably safe from a fraudulent transfer claim. The house is now in your name only? If yes, any judgment against your brother will not affect you.
If the Judgment is filed against your house as a lien, you need to contact the creditor and ask them to remove the lien. If they refuse, you can sue them for "quiet title" and receive damages, attorneys fees and costs.
1, No. You owed the property well before the judgment and the abstract can only create a lien against property in the name of the judgment debtor. If there hand been a lien against your home, you would not have been able to refinance the property.
2. No. If someone gives away an asset for free or next to nothing to hide it from creditors, a creditor could theoretically file a lawsuit to get in back for the judgment debtor and then put a lien on it. But even if the creditors had a valid claim, which I don't think they do, the statute of limitations would have expired long ago.
The bottom line is that I believe you are clear and the title insurance you obtained should protect you.