How likely is it for a junior lienholder to force a sale on mortgaged property?

[missflo]

What is the name of your state (only U.S. law)? New Mexico

My husband and I own a sole proprietorship and our business has been very bad. As a result, a credit card company obtained a judgment against him in the amount of $ 12,000.00. We do not have the many to pay this or we would have kept up the monthly payments in the first place. We are trying to chip away at several outstanding debts but can not manage to pay them all right now. We are not in a position to file bankruptcy nor do we want to. Our business property is our only source of income or hope of ever getting out of debt and I am wondering if this judgment creditor can or is likely to force a sale of this property. The property is mortgaged for $ 485,000.00 and is probably worth $ 585,000.00. In this market, would it be likely for this creditor to force a sale at auction and take a risk of not even being able to pay off the first mortgage?

 

[latigo]

What is the name of your state (only U.S. law)? New Mexico

My husband and I own a sole proprietorship and our business has been very bad. As a result, a credit card company obtained a judgment against him in the amount of $ 12,000.00. We do not have the many to pay this or we would have kept up the monthly payments in the first place. We are trying to chip away at several outstanding debts but can not manage to pay them all right now. We are not in a position to file bankruptcy nor do we want to. Our business property is our only source of income or hope of ever getting out of debt and I am wondering if this judgment creditor can or is likely to force a sale of this property. The property is mortgaged for $ 485,000.00 and is probably worth $ 585,000.00. In this market, would it be likely for this creditor to force a sale at auction and take a risk of not even being able to pay off the first mortgage?

The “risk” the levying judgment creditor (or more likely its assignee) would incur in successfully bidding on the property would be its ability to unload the property at a profit after it delivered to the sheriff certified funds totaling the outstanding mortgage indebtedness, plus any other prior liens and encumbrances and the sheriff’s costs and fees.

In other words, should the creditor wish to make a bid at the sheriff’s sale, it wouldn’t have a choice as to whether it could or could not “pay off the first mortgage”.

Moreover, a purchaser would have to sit on the property awaiting the expiration of the 9 months redemption period. (See: New Mexico Statutes -Judgments Section 39-5-18)

Would your judgment creditor commence a levy of execution faced with such a financial outlay in an attempt to eventually recover a fraction of it? Your guess is a good as mine. But if it did it, would need to borrow the half million $ at a very low interest rate!

 

[LdiJ]

The “risk” the levying judgment creditor (or more likely its assignee) would incur in successfully bidding on the property would be its ability to unload the property at a profit after it delivered to the sheriff certified funds totaling the outstanding mortgage indebtedness, plus any other prior liens and encumbrances and the sheriff’s costs and fees.

In other words, should the creditor wish to make a bid at the sheriff’s sale, it wouldn’t have a choice as to whether it could or could not “pay off the first mortgage”.

Moreover, a purchaser would have to sit on the property awaiting the expiration of the 9 months redemption period. (See: New Mexico Statutes -Judgments Section 39-5-18)

Would your judgment creditor commence a levy of execution faced with such a financial outlay in an attempt to eventually recover a fraction of it? Your guess is a good as mine. But if it did it, would need to borrow the half million $ at a very low interest rate!

In other words, its really really unlikely that an ordinary creditor would go that route. Its far more likely that they would just let the lien sit there until you eventually sell the property or its disposed of in some other fashion.

 

[BigMouthWino]

You claim you have no money to pay your judgment creditor, but you have $100,000 equity in real property? Sorry, but this doesn't square.

Do the right thing: sell the property and pay your bills. Stop running up huge credit card bills you cannot afford. Live within your means.

 

[LdiJ]

You claim you have no money to pay your judgment creditor, but you have $100,000 equity in real property? Sorry, but this doesn't square.

Do the right thing: sell the property and pay your bills. Stop running up huge credit card bills you cannot afford. Live within your means.

Either you didn't read the thread carefully or you are giving dumb advice. They need the building in order to continue to operate their business and generate an income. Selling the building would just make things worse, not better.

 

[BigMouthWino]

Either you didn't read the thread carefully or you are giving dumb advice. They need the building in order to continue to operate their business and generate an income. Selling the building would just make things worse, not better.

Their "income" is insufficient to pay their debts. They should sell the building, repay their creditors, get jobs and live within their means.

Since when did it become their creditor's duty to involuntarily finance a business that obviously does not finance their lifestyle? A court has entered a judgment ordering them to pay. You are advising them to disregard a court order and continue their reckless spending habits. To me, that is "dumb advice."

 

[LdiJ]

Their "income" is insufficient to pay their debts. They should sell the building, repay their creditors, get jobs and live within their means.

Since when did it become their creditor's duty to involuntarily finance a business that obviously does not finance their lifestyle? A court has entered a judgment ordering them to pay. You are advising them to disregard a court order and continue their reckless spending habits. To me, that is "dumb advice."

They are not disregarding a court order. The judgment does not order them to do anything. It gives the creditor the permission to use additional means to attempt to collect a debt. You know nothing about their business.

 

[BigMouthWino]

They are not disregarding a court order. The judgment does not order them to do anything. It gives the creditor the permission to use additional means to attempt to collect a debt. You know nothing about their business.

A money judgment is an order that OP owes their judgment creditor money. The judgment creditor has many more rights such as recording a lien on the business property as a result of OP disregarding the court order.

What I know about OPs business is that its income is insufficient to cover their debts. According to the original post, this is not the only one. Time for OP to grow up, live within their means and repay their creditors. This would be fastest accomplished by selling the property and each of them getting jobs.

What happened to personal responsibility????

 

[LdiJ]

A money judgment is an order that OP owes their judgment creditor money. The judgment creditor has many more rights such as recording a lien on the business property as a result of OP disregarding the court order.

Incorrect...A judgment gives the creditor the right to use liens, levies and other methods of collection that would normally not be available to them in order to collect the debt. A judgment does not order the debtor to do anything.

What I know about OPs business is that its income is insufficient to cover their debts. According to the original post, this is not the only one.

No, you do not know that...nor do you know whether or not your recommendation would makes things better or worse for the sum total of the OP's creditors.

Time for OP to grow up, live within their means and repay their creditors. This would be fastest accomplished by selling the property and each of them getting jobs.

What happened to personal responsibility????

That is a totally personal opinion, not a legal one, and is based solely on your own attitude towards credit and debt.