Full question:
husband and i own house jointly w right of survivorship/bought house together with my money (paper trail goes back 8 years before our marriage) he has a secured business loan that he took out before we owned this house, and because of his business loss has been unable to pay loan back, there is now a lien against house, what is the extent of my liability, also, would a 'NFTL' lien come before the business lien, even if filed after? thanks
- Category: Real Property
- Subcategory: Joint Tenants
- Date:
- State: Connecticut
Answer:
It is possible that they could attach real property if they get a judgment against the debtor that remains unpaid and your name is on the title. However, if it is held as tenants by the entireties, it is possible they may not be able to foreclose on the lien and force a sale of the home. If the property was sold, the debtor's share of the equity in the proceeds could be used to pay creditors. Courts have held that property owned by husband and wife as tenants by the entireties may not be sold to satisfy the debt of only one spouse However, property held as joint tenants who are not tenants by the entireties may be sold to satisfy the a sole debt of one owner, up to the amount of that debtor's equity in the property. The non-debtor owner will receive the balance of his share of equity in the property from the sale.
Generally, a joint owner is not liable for the debts of the other owner as long as it is an individual account, the joint owner running up the debt is not an authorized user, surety, guarantor, or cosignor, and they are not married couple does not live in a community property state. However, even in a community property state the assets of the spouse not running up the debt could be at risk. For example, in cases involving, among others, bankruptcy, divorce, or other litigation, creditors may go after assets held jointly by the debtor and non-debtor spouse such as a bank account in both their names.
Priority of liens is generally determined by the date of recording. Often, the the mortgage holder will have priority over any later filed liens (junior creditors), and the liens junior creditors hold will only be able to be collected out of any remaining proceeds after the mortgage holder is paid. If the property securing the mortgage is sold in foreclosure and no proceeds remain to pay junior creditors, it is possible the junior creditors could attach other assets of a judgment debtor.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
