Will My House Be Sold to Pay Medical Bills if I Don't Answer a Warrant in Debt?
Full Question:
Answer:
A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." If the judgment remains unpaid, the judgment debtor may request that the court place a lien on the judgment debtor's property, such as bank accounts or real property owned, to secure payment of the claim to the injured party. After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt. Wages up to 25% of earnings may also be garnished. If they obtain a judgment, it will include likely be more than the debt, because it will include attorney fees and costs. Whether they will force a sale of the home depends in part on the nature of the debt and how the house is titled. A joint tenancy between a husband and wife is sometimes known as a tenancy by the entirety. Tenancy by the entirety has some characteristics different than other joint tenancies, such as the inability of one joint tenant to sever the ownership and differences in tax treatment. In some jurisdictions, such as Virginia, to create a tenancy by the entirety the parties must specify in the deed that the property is being conveyed to the couple "as tenants by the entirety". Generally, a creditor will not force the sale of property that is held as tenants by the entireties if the debt was solely the debt of only one spouse. A homestead exemption is available for debts up to $500 or if 65 or older, $10,000. Certain property is also exempt from creditor claims, such as a vehicle's worth up to $2,000 if there is no lien on it. We suggest you obtain a homestead exemption form and file it with the land recorder's office in the county where the property is located.
Filing bankruptcy will prevent a foreclosure from proceeding. Prior to making a decision to file bankruptcy, each individual should first attempt to contact his or her creditors and determine whether it is possible to obtain their cooperation in working out a different payment schedule. Most people would be surprised to learn that creditors often are willing to make reasonable modifications to assist the debtor in repayment. Communication and honesty are the key words here. In exploring this option, the creditor should be honest and forthright with the creditor regarding one's financial situation. If your mother has no assets or income, she may be judgment proof, meaning unable to collect payment from. Bankruptcy filing may be unproductive when a person is judgment proof. The automatic stay is one of the most valuable functions of a bankruptcy proceeding for the debtor seeking relief from creditors. The automatic stay immediately stops any lawsuit filed against you and virtually all actions against your property by a creditor, collection agency or government entity and provides an injunction against the continuance of any action by any creditor against the debtor or the debtor's property. After filing for bankruptcy, the automatic stay will prevent creditors from calling and harassing the debtor in any way. In fact, should a creditor continue to attempt to contact the debtor during the automatic stay, that creditor could be held liable for damages.
I suggest attempting to settle the debt before they obtain a court judgment. Hospitals often have credit counselors available who can work with you on reducing the bill or working out a payment plan. Once a judgment is obtained, the creditor will likely be unwilling to negotiate a settlement and may place liens on property, such as bank accounts, or garnish wages. In some cases, a debtor may be able to negotiate a settlement with the creditor, although this is more difficult once a suit has been filed. In some cases, the creditor may settle for a lesser amount if the debtor is insolvent, since a promise to pay something is better than collecting nothing. These types of agreements are called an accord and satisfaction. If it is possible, a debtor should get a release included in such an agreement so that the creditor may not pursue the full balance of the debt claimed.
You have probably heard of debt relief companies. There are also some companies, even credit card companies, that will work out a compromise settlement or reduced monthly payment. Family and friends are also sometimes options. There is really no good answer to your problem, a problem that many people face. Thus options include, but are not limited to, bankruptcy, debt relief company, compromise you do yourself, friends, family, loans. I suggest you resolve the charges before a lawsuit is filed to collect the money owed, which may further damage your credit history.
Another option to examine is Consumer Credit Counseling Service. CCC is a nationwide nonprofit organization that attempts to work with both the debtor and his or her creditors to devise a more manageable repayment plan. This service very often results in revised payment plans which are acceptable to both the debtor and the creditor, thereby eliminating the need to file bankruptcy.
If you need help negotiating with your creditors, consider contacting a nonprofit debt counseling organization. You can find a list of counseling agencies by location at the website of the U.S. Trustee, www.usdoj.gov/ust (select "Credit Counseling and Debtor Education.") The federal government has authorized the agencies on this list to provide counseling to debtors considering bankruptcy. However, don't pay anyone to "fix" your credit.
The following link allows you to search by area for financial counselors recomended by Dave Ramsey:
http://www.daveramsey.com/coaching/find-coach/
Please read the tips from the Better Business Bureau on selecting a credit counselor :
http://www.bbb.org/alerts/article.asp?ID=613
The following organization is a referral from the Better Business Bureau:
http://www.clearpointcreditcounselingsolutions.org/?source=bbb_tip_choose
Please see the following VA statutes:
§ 34-4. Exemption created. —
Every householder shall be entitled, in addition to the
property or estate exempt under
§§ 23-38.81, 34-26, 34-27, 34-29, and 64.1-151.3, to hold
exempt from creditor process arising out of a debt, real
and personal property, or either, to be selected by the
householder, including money and debts due the householder
not exceeding $5,000 in value or, if the householder is 65
years of age or older, not exceeding $10,000 in value. In
addition, upon a showing that a householder supports
dependents, the householder shall be entitled to hold
exempt from creditor process real and personal property, or
either, selected by the householder, including money or
monetary obligations or liabilities due the householder,
not exceeding $500 in value for each dependent.
For the purposes of this section, "dependent" means
an individual who derives support primarily from the
householder and who does not have assets sufficient to
support himself, but in no case shall an individual be the
dependent of more than one householder.
§ 34-6. How exemption of real estate secured; form to
claim exemption of real property. —
In order to secure the benefit of the exemptions of real
estate under §§ 34-4 and 34-4.1, the householder, by a
writing signed by him and duly admitted to record, to be
recorded as deeds are recorded, in the county or city
wherein such real estate or any part thereof is located and
if such property is located outside of the Commonwealth, in
the county or city where the householder resides, shall
declare his intention to claim such benefit and select and
set apart the real estate to be held by the householder as
exempt, and describe the same with reasonable certainty,
affixing to the description his cash valuation of the
estate so selected and set apart. Equitable as well as
legal estates may be so selected and set apart. The
following form, or one which is substantially similar,
shall be used and shall be sufficient for the writing
required by this section:
HOMESTEAD DEED FOR REAL PROPERTY
Name of Householder _______________________________________________
Name of title holder of record (if different) _____________________
Is the householder a disabled veteran entitled to claim the
additional exemption under § 34-4.1? ______________________________
Address of Householder ____________________________________________
Name(s) and age(s) of dependent(s) ________________________________
County/city/state in which real property claimed as exempt is
located ___________________________________________________________
___________________________________________________________________
Description of property claimed as exempt _________________________
___________________________________________________________________
___________________________________________________________________
Value of property described above _________________________________
Number of homestead deeds that have been filed by the Householder
___________________________________________________________________
Exemption amount previously claimed on prior homestead deeds
___________________________________________________________________
List the jurisdictions where previous homestead deeds were filed
___________________________________________________________________
________________________ ___________________________
________________________ (Signature of Householder)
________________________
[ACKNOWLEDGMENT]
§ 34-26. Poor debtor's exemption; exempt articles
enumerated.
In addition to the exemptions provided in Chapter 2 (§ 34-4 et
seq.) of this title, every householder shall be entitled to hold
exempt from creditor process the following enumerated items:
1. The family Bible.
1a. Wedding and engagement rings.
2. Family portraits and family heirlooms not to exceed $5,000 in
value.
3. (i) A lot in a burial ground, and (ii) any preneed funeral contract
not to exceed $5,000.
4. All wearing apparel of the householder not to exceed $1,000 in
value.
4a. All household furnishings including, but not limited to, beds,
dressers, floor coverings, stoves, refrigerators, washing machines,
dryers, sewing machines, pots and pans for cooking, plates, and eating
utensils, not to exceed $5,000 in value.
5. All animals owned as pets, such as cats, dogs, birds, squirrels,
rabbits and other pets not kept or raised for sale or profit.
6. Medically prescribed health aids.
7. Tools, books, instruments, implements, equipment, and machines,
including motor vehicles, vessels, and aircraft, which are necessary for
use in the course of the householder's occupation or trade not exceeding
$10,000 in value, except that a perfected security interest on such
personal property shall have priority over the claim of exemption under
this section. A motor vehicle, vessel or aircraft used to commute to and
from a place of occupation or trade and not otherwise necessary for use
in the course of such occupation or trade shall not be exempt under this
subdivision. "Occupation," as used in this subdivision, includes
enrollment in any public or private elementary, secondary, or career and
technical education school or institution of higher education.
8. A motor vehicle, not held as exempt under subdivision 7, owned by
the householder, not to exceed $2,000 in value, except that a perfected
security interest on the motor vehicle shall have priority over the claim
of exemption under this subdivision.
The value of an item claimed as exempt under this section shall be the
fair market value of the item less any prior security interest.
The monetary limits, where provided, are applicable to the total
value of property claimed as exempt under that subdivision.
The purchase of an item claimed as exempt under this section with
nonexempt property in contemplation of bankruptcy or creditor process
shall not be deemed to be in fraud of creditors.
No officer or other person shall levy or distrain upon, or attach, such
articles, or otherwise seek to subject such articles to any lien or
process. It shall not be required that a householder designate any
property exempt under this section in a deed in order to secure such
exemption.
§ 34-4.1. Additional exemption for certain veterans.
—
Every veteran residing in this Commonwealth having a
service connected disability of forty percent or more, as
rated by the Veterans Administration of the United States,
shall be entitled, in addition to the property or estate
which he is entitled to hold exempt from creditor process
under §§ 34-4, 34-26, 34-27, 34-29, and 64.1-151.3, to hold
exempt from creditor process his real and personal
property, or either, to be selected by him by the writings
required by §§ 34-6 and 34-14, including money and debts
due him, not exceeding $ 10,000 in value.
