Sarasota Homes For Sale

I am not an attorney, I am a Judgment and Collections Broker. This article is my opinion, from my experience in California, and laws are different in every state. If you want legal advice or a strategy to use, please contact an attorney.

Historically, one easy way to recover a judgment was to record a judgment lien on a judgment debtor’s real estate.

When property was increasing in price, resales and refinances happened often enough that one could count on getting paid eventually (usually in full), by recording a judgment lien on the debtor’s real estate property.

These days, some properties are upside down, and recording liens on underwater real estate often seems to be a waste of time and money. Yet, even now, some properties still sell, and get refinanced.

When your lien is recorded properly, you might one day get a letter or a call. Often the judgment debtor or someone working with them on a sale or a loan, may contact you.

Sometimes their side may offer to pay in full, other times they will tell or ask you, to settle for a fraction of what is owed, to release your lien.

Someone’s promise is only a concept, and you require money. Usually, you will be asked to complete a “release of lien” form, based on their promise to repay you. The payment should originate from an escrow fund. If the payment is not originating from an escrow account, be careful.

How could you be sure you will be repaid, and how should one handle this situation? Be sure to get paid, prior to releasing a lien, and especially before satisfying a judgment.

These days, it is a good idea to compromise if appropriate. When they ask to pay 1/2, offer 15% off, then negotiate, in response to the situation with the judgment debtor. “Know when to hold them, know when to fold them”. Try to make deals work, but try not to get tricked.

When you are told you must take ten percent of what is owed, or else be paid nothing, ask what creditors are willing to settle for that much.

When you’re the only one getting warned/asked that you need to discount steeply, that could be a warning sign. One strategy is to have a goal of only giving breaks to debtors with difficult situations.

Before releasing a lien, you should be a party to the escrow, the same as a lender. You might bring your lien release to the escrow closing, and give it to them, immediately after they hand you a certified check.

It’s usually a good idea to insist on dealing with the escrow company directly. Ask the escrow or title entity to send you their demand release request (sometimes called a pay-off statement).

Usually, the title or escrow company sends you a lien release request, or a payment statement request. Fill it out, or create your own answer sheet for them. Make sure to write, that you will release the judgment lien and satisfy the judgment, after you are paid in full.

Along with the response to the demand release request, also send the title or escrow company a payoff statement.

A payoff statement should include the balance due as of the statement date, and include a daily interest amount, so they can calculate any future balance. If you are the assignee of record, mention that.

Make sure to satisfy the judgment, after you get repaid most of what is due. In the game of judgment recovery, recovering 85% of what is due is a major score.

Title companies don’t care that much if you satisfy the judgment or release the judgment lien, as they can prove they paid you. However, the laws and ex-judgment debtors do care, so be sure the judgment lien release, and the satisfaction of judgment is performed correctly.

To prevent problems, some judgment creditors include an extra charge, in exchange for paying and working, to handle all the needed paperwork and filings. When answering a payoff statement or a demand release request, they add their charge, to get a certified copy of the satisfaction of judgment, and record it at the county recorder, and send the title company a copy of the recorded documents.

Here is an example of a lien release I have used:

Your Name (your capacity – judgment creditor or assignee of record) Your Address Your City, State, Zip Your Phone Number and Email

SUPERIOR COURT OF THE (YOUR STATE) OF YOUR STATE COUNTY OF (YOUR COUNTY), YOUR DIVISION (civil, small claims, etc.)

Case # 99999999 RELEASE OF JUDGMENT LIEN CCP 697.370 Pat Plaintiff vs. Dan Defendant The undersigned hereby releases from the judgment lien described herein, all of the interests in the real property in YOURCOUNTY County, presently owned or hereafter acquired of the herein named judgment debtors subject to the judgment lien.

The judgment lien released, is in the name of Dan Defendant, from the lien recorded April 12, 2010, as instrument number 12-12-121212 as recorded in the office of the County Recorder of YOURCOUNTY County, YOURSTATE, described as:

Lot 17, Tract Number 1111, in the City of Debtorville, and County of YOURCOUNTY in the state of YOURSTATE, as per the map recorded in book 100, page 199 in the office of the County Recorder of YOURCOUNTY, commonly described as 22222 Defendant Street, Debtorville, VA 99999, having an assessor parcel number of: 33-VAA-99999.

Executed at: __________________________ this 28th day of April, 2011

By: _________________________________ YOUR NAME (Capacity).