I just got off the phone with a seller today who was a very sweet woman wanting to sell her house, but there was nothing that I could do simply because the numbers didn't work for me.
That being said, even if I can't buy a house from someone I always want to try and help people whenever possible. Having written 3 books and purchased as many homes as I have, you can't help but learn a thing or two about real estate, sometimes the hard way.
In any event, the seller and I got to talking and she was also concerned about past due medical bills that she owed and was very worried about the creditor putting liens against her and thereby making her house even more of a problem property. She wants out of this house, but can't seem to get a break. Her payments are high, she has no equity, and the neighborhood is beginning to become a problem.
I'm not an attorney and I do not provide legal advice, but from my experience the best thing she could do would be to get the property out of her name and into a Trust. She would own the Trust and the Trust would own the house. Therefore, if the creditor did put a lien on the property and the property was in the Trust then this lien would not attach to the house and would not prohibit her from selling it at a future date.
There is one very important caveat to this example…She must make sure that the transfer of her house into a Trust does not result in a fraudulent conveyance. Based on my brief discussion with her, this didn't appear to be the case simply because she was in good standing with the creditor and making monthly payments to them.
Bottom line is this. Putting your property into a Trust may be the best option for you to consider as a seller if you are concerned about judgment liens. Speak with a competent real estate attorney who knows the benefits of Trusts before you do anything. Be honest with them and do what is in YOUR best interest. And don't be afraid to get a second opinion.
Hope this was helpful,
P.S. If you want to sell your Lexington, KY house then give me a call at 859-935-1233.