Posted by John Merchant on April 15, 2011 at 18:41:56:
Good friend of mine, Lorelei Stephens of Seattle is the nationally known expert on these divorce liens which are quite common.
She buys all she can find and this one sounds typical of those she’d be interested in.
In divorce/domestic relations cases it’s quite common for court to award (agreed between H & W or not) the house to the Mom of youngsters to live in so long as the kids are minors.
And the ex-H gets a lien which gives him right to half the proceeds from the house at that time…thus the name “Divorce Lien”.
Lorelei Stephens, Pres/owner of Wall St Brokerage
(206) 448-1160.
Tell her I recommended her and her great knowledge of this field.
I was approached to purchase a Stipulated Judgment for a divorce where the husband is awarded a $120,000 lump sum due in October 2014. The ex-wife owns a home and a vacation house where (we will assume for this discussion and I will confirm before closing) there is tons of equity and each property has a small loan taken out over 10 years ago.
I am looking for some general information. If you know any good resources on this topic, please share where I can find them.
What lien priority would the judgment have with regard to the current loans on the property or if new loans were put on the property?
If the lump sum was not paid, how does one collect?
What documents are typically used to transfer the lump sum to my investor?
The husband is paying child support, if he stops could the wife deduct past due support payments from the award?
Can she get out of paying the award through bankruptcy or selling the properties before the award is due and has no properties to attach the award to? Any other things to consider how she could avoid paying?
Is there a difference where the judgment was stipulated between parties and a judgment awarded from a trial?
Posted by John Hyre on April 26, 2011 at 09:02:36:
We buy Ohio judgments, though that is a recent development. Given that we have a law office in Ohio, it’s a natural fit & keeps my staff busy during down times.
There are some courses on the subject. I have Michael Warren’s course and like it. NOTE: I do not know Michael very well. He has had some issues in the past, but also seems to have gotten beyond them. In short, I like his “Buying Judgments” course, I do not have a positive or negative recommendation with regard to his other offerings.
On a judgment of the size you are talking about, you will need to do some due dilligence, both with regard to state law (i.e. - any chance of judgment being overturned? Problems with assignment? etc) and collectibility (you seem to have some idea of debtors position).
Your questions quite broad are more than I’m looking to answer, here’s a link with some helpful data:
A google search will show you more such sites. Once you have a general idea of what to do, you can come back here with some more specific (and easier to answer!) questions.