I am 64. I own a small condo in San Diego worth about 200 k. I lost my job in 2008, became disabled on & off. i have no income now. I moved out and rented the condo to save it as the rent pays the bills for it & the dues and insur. A credit card co sued me a won a default and put a lien on the property for 32k. They did not serve me and only noticed me after the fact. I homesteaded my condo years ago. I have also recently been married but my husband is european and has no financial means to help me in this. The amount owed to the mortgage Co is 42k so even with the homestead allowance &a small income tax lien, they could still get 32k from me- even though time & again , I contacted them and tried to work with them. My condo is all I have in the world. Is there any way out of this 32k?
Homestead typically will only protect real estate you live in as your home. You may want to consider whether you should move back in in order to protect your equity in this property. It is possible to remove a judgment lien in bankruptcy through an extraordinary proceeding against your home. See a local bankruptcy attorney with lots of experience for advice & representation. Hope this perspective helps!
I've had clients tell me what their home was worth, but they were giving me 2004 numbers. If your home was valued pre-2008 you need to make sure it's really worth 200K. Start with the tax assessor's valuation but don't stop there. See if you could get a third party to do it if you think there might be the possibility of coming down further-- you don't have that far to go!
Also, to get the homestead exemption, it has to be your residence.
Your homestead protection will not protect you if you have the property rented. You have to live there for that protection. If you were not served with process, you could make a motion to set-aside the judgment. Whether that would be of any benefit depends on: 1) whether the court accepts your version of the facts; 2) whether you have a defense to the claim, such as the statute of limitations.
If you are able to move back into the condo so that you can take advantage of the homestead exemption a bankruptcy may be of benefit if the judgment impairs that exemption. You would need up-to-date FMV data and exact lien information before that determination could be made. Property values are rising again so it would be best to make that move, if you are going to, sooner than later. After you have those numbers, a consultation with a BK attorney in your area is the logical next step.
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When is your birthday? The homestead exemption in California is $175,000 for persons 65 years or older.
704.730. (a) The amount of the homestead exemption is one of the
(1) Seventy-five thousand dollars ($75,000) unless the judgment
debtor or spouse of the judgment debtor who resides in the homestead
is a person described in paragraph (2) or (3).
(2) One hundred thousand dollars ($100,000) if the judgment debtor
or spouse of the judgment debtor who resides in the homestead is at
the time of the attempted sale of the homestead a member of a family
unit, and there is at least one member of the family unit who owns no
interest in the homestead or whose only interest in the homestead is
a community property interest with the judgment debtor.
(3) One hundred seventy-five thousand dollars ($175,000) if the
judgment debtor or spouse of the judgment debtor who resides in the
homestead is at the time of the attempted sale of the homestead any
one of the following:
(A) A person 65 years of age or older.
(B) A person physically or mentally disabled who as a result of
that disability is unable to engage in substantial gainful
employment. There is a rebuttable presumption affecting the burden of
proof that a person receiving disability insurance benefit payments
under Title II or supplemental security income payments under Title
XVI of the federal Social Security Act satisfies the requirements of
this paragraph as to his or her inability to engage in substantial
(C) A person 55 years of age or older with a gross annual income
of not more than twenty-five thousand dollars ($25,000) or, if the
judgment debtor is married, a gross annual income, including the
gross annual income of the judgment debtor's spouse, of not more than
thirty-five thousand dollars ($35,000) and the sale is an
Depending on a host of additional factors, including total household income from all sources, total community property assets and your separate property assets (if any), etc., etc., AND whether you will be moving back into the subject property....
... filing a bankruptcy may be able to provide a solution to you in the form of avoiding the judgment lien that has attached to the real property and discharging/extinguishing the underlying debt. Accomplishing this through a bankruptcy case is extra-ordinary work and requires additional services and fees, but may be well-worth it to relieve yourself of this debt obligation and secure a fresh start.
Further, my colleague's comment regarding TRUE and ACCURATE home valuation is well advised: property values are on the rise (again... for how long who knows) and an ACCURATE, CURRENT VALUATION will be critical to your future success in avoiding the judgment lien, should this be your course of action.
Best of luck!
Michael Salanick, Esq.
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