Debt Questions & Answers

My DH and I have been married just a couple of years.  When we married I sold my home (he rented) and using my equity and add'l funds of mine "we" purchased a new home.  Because DH had credit issues due to his exwife my name is the only one on the mortgage however, both of our names are on the deed. 

Now DH has a creditor (remaining from former marriage) threatening to take him to court and placing a lien on our home.  DH was laid off from his job last month.  

My question is can they do this since I am not associated in any way with that debt--my name is not on the account and the account predates our marriage?  If they can, should we pay an attorney to draw up a quit claim for my husband's name to go off the deed? 

Yes, a creditor can place a judgment lien against property recorded to a debtor.  Because your husband's name in on the deed, the asset popped up when the creditor ran a search.  Whether or not your husband is on the mortgage is a separate matter.  He is recorded as an owner of a home and that means the creditor can record a lien against that property.  Doesn't seem fair since the property was acquired with your savings, your prior home's equity and your good credit which qualified you for the mortgage.  Now all your money and your credit is in very real jeopardy.  The sole reason is because his name is recorded as an owner of the house.

It's a very effective method for creditors to collect.  The sad part is that these type of liens quietly sit there earning interest.  Typically 10%.  It doesn't take long for the interest to accumulate and outstrip the original debt.  Should you want to refinance or sell the house, you would have to pay off the lien.  Should you sell the house, the massive unpaid lien could swallow every last penny of profit you could make on the sale.  This is why liens are very effective.  This is why liens are to be avoided.  Good for you for seeking out information to understand the mechanism, the why, wherefore and options.

I would suggest your husband make arrangements with the creditor to pay the debt.  You want to avoid going to court and, by all means, avoid a lien against your home.   In the alternative you could take his name off the house, but speak with a lawyer about how to proceed to ensure this completely insulates your home from his liens and completely removes his name. 

This would be a good time to go to your recorder's office and see what, if anything, is recorded against your home.  If he has a lien already recorded against your home, then you won't be able to quit claim it away.  Once the damage is done you are seriously on the hook and the only way to get rid of that lien is to pay it off.

Hope this helps.

Carolyn