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Judgments And Community Property
Especially in community property states, property ownership claims can be complex. I am a judgment broker, not a lawyer, and this article is my opinion, please consult with a lawyer if you need legal advice.
If you have a judgment lien down on one spouse, who co-owns a community property with their other spouse; your lien covers the judgment debtor's share of property ownership, so a new buyer/owner cannot claim a homestead exemption or any other exemptions. If you start a foreclosure proceeding, the new owner will have to figure out what they need to do.
Whatever the judgment debtor might do to "get their name off title" is a recordation not in the chain of title, so your lien remains on record. There is no way that someone attempting to purchase a real property could ever fail to have constructive notice of the recordation of your abstract of judgment, which created a judgment creditor lien against the interests of the judgment debtor, whether they give the property to someone else, burned the deed, or recorded another deed without their name.
A husband cannot unilaterally change the vesting on title, to remove a co-owner simply by asking a title company to remove the wife from title, without the wife first signing a quitclaim or grant deed. Quitclaim deeds must be notarized, to prevent the highly coveted and often attempted forgery of the judgment debtor spouse's signature to achieve such a result. If the wife is named as a defendant on the judgment, without a judge's order; no title company would have been willing to do such an unlawful act.
A husband may not remove a wife from title without her consent; if the title was vested in both names at the time of purchase. If he vested title in her by deliberate action such as signing a grant deed at some point in the past; the husband cannot later prevail in a quiet title action against the wife, if it was his action that vested her rights.
A new husband has no right to remove his judgment debtor spouse from title simply because he wants to do so, and that means that your lien also stays. If the husband wishes to refinance, he must live with the unintended consequence of placing his new spouse (the judgment debtor) on title in the first place. She has a viable interest in the real property and cannot be removed by a quiet title action.
Creditors often wait to perfect their fraudulent transfer claims against the transferee (by way of entry of their judgment). The question is, what you get by waiting? One may sue the husband, (although they might not appear on title). If you have the judgment against the wife for fraudulent transfers; you might be able to have the Sheriff levy on bank accounts held in both names.
Even if this is not possible, a judgment creditor can subpoena their lender to see where the proceeds of the loan were deposited; and then levy on it, if it is in the name of the husband. By extension, the creditor can also levy on the account in the name of the wife because the proceeds are not going to be her sole and separate property in a community property state; because they encumbered community debt to get the money. When the husband is transferring the house to his wife; it is unlikely they can make the case that, in addition to that transfer, the wife is entitled to claim the proceeds of the loan as her sole and separate property.
You cannot look at the lender documents quite yet; if the loan was to both of them when you only have a judgment against one of them. You could try, however your fraudulent transfer judgment will probably arrive before the court might grant you access to that information.
If you jump the gun, you will give the debtors notice that you are looking for their funds, and they might move their money out of state. If you simply stay still, and wait for the judgment against the wife; then you can subpoena the lender because the loan is against the house of which she was the fraudulent transferee, to see where the proceeds of the loan went, and then levy on whatever account the money is in; regardless of how it is held.
Even with appropriate notices to consumer, they cannot keep you from seeing the information. You might not have to levy on the debtor(s) house to sell it. Levying a property is a risky and somewhat dicey proposition these days. Who is going to pay 90 percent of the fair market value for any real property?
When the creditor knows for a fact that the judgment debtor got a loan, they can OEX/ORAP the judgment debtor husband and also the wife as holding more than $250 belonging to the husband. Then, ask them where the proceeds from the loan were distributed. Ask for account numbers, etc. Then, get a restraining order that keeps them from moving the funds out of those accounts.
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