Can a lien be placed on my home for a judgement against my husband only?

Full Question:

I hold an individual mortgage on my home and am in the process of refinancing. When the lender checked title, a judicial lien was found against my husband. Based on information I found concerning the judicial lien statutes in Michigan, I do not believe that this lien is proper. MCL 600.101 to 600.9947, Chapter 28, Section 2807 says that a judgment lien does not attach to entireties property unless the underlying judgment is against both husband and wife. This is not the case. This lien must be removed so I can complete the refinance. What is my best avenue to get this lien removed from title quickly?
01/08/2009   |   Category: Judgment Liens   |   State: Michigan   |   #14952

Answer:

The answer to your question depends on how the property is titled. The statute you cited applies to property that is owned by husband and wife as tenants by the entirety.

Joint tenancy is a form of ownership by two or more individuals together. It differs from other types of co-ownership in that the surviving joint tenant immediately becomes the owner of the whole property upon the death of the other joint tenant. This is called a "right of survivorship." State law, which varies by state, controls the creation of a joint tenancy in both real and personal property, such as houses, bank accounts, and corporate stocks. Generally, for transfers to two or more persons who are not husband and wife, the deed or conveyance must expressly state an intention to create a joint tenancy by noting that the property will be held not as tenants in common but as joint tenants with rights of survivorship. Joint tenancy property passes outside of probate, however, it may be severed so that the property becomes part of one person's estate and passes to that person's heirs.

A joint tenancy between a husband and wife is generally 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. Each joint tenant has an equal, undivided interest in the whole property. Each joint tenant may enter onto, take possession of the whole, occupy, and use every portion of the common property at all times and in all circumstances. All joint tenants, and their spouses, must sign deeds and contracts to transfer or sell real estate. The right of survivorship can be eliminated by ending the joint tenancy before a tenant's death through a process called "severance". Severance means that the joint tenants disrupt the unity of their interests in the property through mutual agreement or unilateral action so that they become tenants in common instead of joint tenants. A joint tenant may convey his or her interest to a third party, depending on applicable state law. This conversion would in effect terminate the joint tenancy and create a tenancy in common.

The following is general information regarding judgment liens and discharge:

A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." Judgment liens may be created through a wide variety of circumstances. Generally, if the debt is not paid, the judgment creditor can then seek to enforce the judgment by garnishing wages, seizing a bank account, or placing a lien against the debtor's property. 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. If a lien were placed on a home, the judgment creditor would then seek to foreclose on the property, in the same way a mortgage holder such as a bank would foreclose if it were not paid. Laws regarding judgment liens vary by jurisdiction, so local laws should be consulted for specific requirements.

Liens can be discharged after a certain length of time. Therefore, if a property owner is in no hurry to sell the property, and the lien holder is not seeking to foreclose, it may make sense to do nothing and wait until the lien expires. If the lien is not renewed, the cloud on the title will no longer exist. If a person pays and satisfies a lien in order to have it discharged, it is imperative that a written, legally sufficient release or satisfaction be obtained and recorded in the appropriate government office. Doing so ensures clear title to the property.

The following are Michigan statutes:

600.2803 Attachment; conditions.

Sec. 2803.

A judgment lien attaches to a judgment debtor's interest in real
property if a notice of judgment lien is recorded in accordance with this
chapter in the land title records of the register of deeds for the county
where the property is located. The judgment lien attaches at the time the
notice of judgment lien is recorded or, for after acquired property, at
the time the judgment debtor acquires the interest in the property.

600.2805 Notice of judgment lien; certification; service.

Sec. 2805.

(1) The clerk of a court that entered a judgment shall certify a notice
of judgment lien that has been filed with the court and that includes all
of the following:

(a) The case caption and docket number.

(b) The current name and address of the judgment creditor and, if
the judgment creditor has an attorney, the attorney.

(c) The name, last 4 digits of the social security or tax
identification number, and last known address of the judgment debtor.

(d) The current balance due on the judgment.

(e) The date the judgment was entered, the expiration date of the
judgment, and the expiration date of the judgment lien.

(f) The signature of the judgment creditor or the judgment creditor's
attorney.

(2) A notice of judgment lien need not include a legal description
of the debtor's interest in real property.

(3) Except as provided by subsection (4), a copy of a notice of
judgment lien that has been certified under subsection (1) shall
be served by certified mail on the judgment debtor at the judgment
debtor's last known address. Proof of service shall be filed with
the court that issued the judgment.

(4) If the judgment that is the subject of the judgment lien is
for $25,000.00 or more, a copy of a notice of judgment lien that
has been certified under subsection (1) shall be personally served
on the judgment debtor and proof of service filed with the court
that issued the judgment.

600.2807 Property owned as tenants by the entirety; priority;
exceptions; sale or refinance of property subject to judgment lien;
limitation on proceeds.

Sec. 2807.

(1) A judgment lien does not attach to an interest in real property
owned as tenants by the entirety unless the underlying judgment is
entered against both the husband and wife.

(2) With the following exceptions, a judgment lien has priority
over a lien recorded with the register of deeds after the notice
of judgment lien is recorded:

(a) A purchase money mortgage.

(b) A mortgage to the extent that proceeds of the mortgage are
used to pay 1 or more of the following:

(i) Purchase money mortgage debt.


(ii) A subsequent refinancing of purchase money mortgage debt.


(iii) A nonpurchase money mortgage recorded before attachment of
the judgment lien.

(c) A lien that secures an advance made under a previously recorded
future-advance mortgage.


(d) A lien that has or acquires priority by operation of law.


(e) A claim of lien recorded with the register of deeds under section
111 of the construction lien act, 1980 PA 497, MCL 570.111.

(f) A lien for unpaid assessments or charges due to a condominium
association, homeowners' association, or property owners' association
that arises from or pursuant to recorded restrictions that run with the
land.

(g) A state or federal tax lien.

(3) If property subject to a judgment lien recorded under this
chapter is sold or refinanced, proceeds of the sale or refinancing due to a
judgment creditor are limited to the judgment debtor's equity in the
property at the time of the sale or refinancing after all liens senior to
the judgment lien, property taxes, and costs and fees necessary to close
the sale or refinancing are paid or extinguished.

600.2809 Judgment lien; expiration; rerecording; tolling or suspension of
time period; judgment lien extinguished.

Sec. 2809.

(1) Unless subsection (2) or (3) applies, a judgment lien expires
5 years after the date it is recorded.

(2) Unless subsection (3) applies, if a judgment lien is rerecorded
under subsection (4), the judgment lien expires 5 years after the date it
is rerecorded.

(3) If the judgment expires before the judgment lien expires, the
judgment lien expires on the date that the judgment expires.

(4) A judgment lien may be rerecorded only once. A judgment lien is
rerecorded by recording with the register of deeds, not less than 120
days before the initial expiration date under subsection (1), a second
notice of judgment lien that has been certified by the clerk of the court
that entered the judgment.

(5) The filing of a state or federal insolvency proceeding by the
judgment debtor does not toll or suspend the time period in which
a judgment lien is effective.

(6) A judgment lien is extinguished when 1 or more of the following are
recorded with the office of the register of deeds where the judgment lien
is recorded:

(a) A discharge of judgment lien signed by the judgment creditor
or the judgment creditor's attorney.

(b) A certified copy of a satisfaction of judgment that has been
filed with the court that issued the judgment.

(c) A certified copy of a court order that discharges the judgment
lien.

(d) A copy of the judgment debtor's discharge in bankruptcy issued by a
United States bankruptcy court and a copy of the bankruptcy schedule
listing the judgment debt. This subdivision does not apply if an order
entered in the judgment debtor's bankruptcy case determining that the
debt is nondischargeable is recorded with the register of deeds.

600.2811 Recording discharge or partial discharge of judgment lien.

Sec. 2811.

Within 28 days after payment in full of the amount due on a judgment
that is the basis for a judgment lien, the judgment creditor or the
judgment creditor's attorney shall record a discharge of judgment lien
with the office of the register of deeds where the judgment lien is
recorded. If payment on a judgment lien is made from the judgment
debtor's equity as described in section 2807(3) and is not payment in
full of the amount due on the lien, the judgment creditor or the judgment
creditor's attorney shall record a partial discharge of judgment lien for
the amount paid.

600.2813 Failure of judgment creditor to record discharge of judgment
lien; liability; filing of affidavit by judgment debtor.

Sec. 2813.

(1) A judgment creditor that has not recorded a discharge of judgment
lien as required by section 2811 shall record the discharge within 14
days after receiving a written request from the judgment debtor by
certified mail. A judgment creditor that fails to comply with this
section is liable to the judgment debtor for $300.00 plus all actual
damages and costs sustained by the judgment debtor because of the
failure.


(2) If a judgment debtor has paid a judgment in full or has made a
partial payment from equity as described in section 2807(3), has sent a
request under subsection (1), and is unable, after exercising due
diligence, to locate the judgment creditor or the judgment creditor's
attorney, the judgment debtor may record an affidavit that complies with
this subsection with the register of deeds with whom the judgment lien is
recorded. The judgment debtor shall state in the affidavit that the
judgment debtor sent a request under subsection (1) to the judgment
creditor or the judgment creditor's attorney and shall attach to the
affidavit a copy of a written instrument that evidences payment of the
judgment and a copy of the receipt for the certified mailing of the
request. Recording the affidavit, written instrument, and receipt
discharges the judgment lien completely or, if payment is made from the
judgment debtor's equity as described in section 2807(3) and is not
payment in full of the amount due on the lien, partially to the extent of
the amount paid.

600.2819 Foreclosure.

Sec. 2819.

There is no right to foreclose a judgment lien created under this
chapter. At the time the judgment debtor makes a conveyance, as that term
is defined in section 35 of 1846 RS 65, MCL 565.35, of, sells under an
executory contract, or refinances the interest in real property that is
subject to the judgment lien, the judgment debtor shall pay the amount
due to the judgment creditor, as determined under section 2807(3), to the
judgment creditor.

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