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Can you get a property out from under being collateral for a surety agreement?
Dr. Frenchenstein
Registered User regular
Registered User regular
I think i worded that correctly. So, i sued a guy way back when, he refused to pay the judgement. There is a warrant out for his arrest, but the likelihood of him being picked up is slim since he bolted out of state. So i filed a writ of execution on one of his properties to sell it at auction. Unfortunately, there is a surety company on the land record who has a $100k interest in the property. The thing is probably only going to sell for like $30k at most, so clearly nobody is going to want to pay $100k on top of that.
My issue is, i don't think it's a mortgage. The guy was/is a bail bondsman, and i think the house is simply collateral for the money he uses in his business. Is there a way to emancipate the property from that? it's not a loan per se, (i don't think) basically my understanding is, some perp has his bail set at 100k. They pay the dude i sued 10% of that, he pays the rest using the house as collateral. If they go to court as promised, he gets the 100k back, and keeps the 10%. no harm no foul. if they skip bail, the surety company can potentially come after the house to cover that (they will be super disappointed if it ever came to that... however. I'm going to call the surety company today (they may be interested that their $100k interest will not get them very far at least) to ask them what this thing really is, but if i'm right any lawyers out there in PA land know anything about this?
My issue is, i don't think it's a mortgage. The guy was/is a bail bondsman, and i think the house is simply collateral for the money he uses in his business. Is there a way to emancipate the property from that? it's not a loan per se, (i don't think) basically my understanding is, some perp has his bail set at 100k. They pay the dude i sued 10% of that, he pays the rest using the house as collateral. If they go to court as promised, he gets the 100k back, and keeps the 10%. no harm no foul. if they skip bail, the surety company can potentially come after the house to cover that (they will be super disappointed if it ever came to that... however. I'm going to call the surety company today (they may be interested that their $100k interest will not get them very far at least) to ask them what this thing really is, but if i'm right any lawyers out there in PA land know anything about this?
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http://www.churchangel.com/WEBPA/phily.htm
There's some near Philadelphia.
Property law stuff is all state law, so you don't need a "lawyer," you need a lawyer who knows the property law of your jurisdiction.
It's possible something is wrong with the way they recorded the lien. I have seen a major bank lose tens of millions of dollars with that kind of mistake. But somebody who knows what they're doing would have to look at the filing for you.
I would think there would be a universal law in relation to this kind of arrangement though. if you owned multiple properties, couldn't you just take a HELOC out on every property, never use it, and protect all your property from seizure? There has to be a way around this, i'm just wondering if i picked the worst one out of his properties and it's worth it to just shell out for the paperwork on a different one and start over, rather than attempt to "invalidate" the deed of trust. (paperwork is around $150-200/property, so i'm not inclined to just keep throwing darts at a dartboard.)
If he runs his own loan business, I'm sure he can't levy his own property to give other people money. But again, lawyer should be able to tell you that. That sets off my bullshit common sense. I mean he can probably file the paperwork and think he's legit, but if anyone gets wise and looks into it, he can probably get himself into jail and lose all his properties.
see that's what i was expecting, but didn't want to hear.
Also, upon a research breakthrough, this guy is no criminal mastermind, i just picked the worst possible property to try and seize, as none of the other ones are entangled (that i can tell). so back to file another writ of execution i guess.
That security interest needs to be specified and valued. If it's a collateral agreement for his bonded license and there haven't been any claims against the bond, it might have no value and you might be able to have it released by request or legal action. If it secures a debt, then you need to figure out the actual balance of that debt. Depending on a lot of things, your lawyer, a title company, the county, or someone else might be able to get that payoff balance for you. That's something that should have been done before you moved to execute on the property, but you can do it now.
In conclusion - Lawyer.
So essentially @LaPuzza, this is likely going to cost a bunch of time/money to clear up, if i can clear it up at all?
it wasn't by design, it was done way back in 2002, but man that would make this story so much more shitty.
I hear you saying that, but you went to all the effort to type up that particular thread title and then started your OP with the a phrase that went something like, 'I think I used all of those words correctly.' A psychiatrist would suggest that you're subconsciously asking us to tell you that you need a real estate attorney.
There's no way to know how much this might cost, or if its worth the effort, until you move down the road a little on it.
Here, you could call the secured party and they might say "Oh, damn, we should have released that years ago. We'll take care of that right away!" Or, you might find out that they have an amount owed, but that its only for $5,000, and you'll get the rest. Or, you could find out that they're owed a billion dollars and they're going to start foreclosure tomorrow and that you don't want to touch at all. Or you could find out that the surity agreement has expired under applicable law and you're in first position and can bid your debt and take title to the property. There's a lot of ways this could go, good or bad, but a lawyer in an hour can put the wheels in motion to get you a much, much clearer picture.
One note seperate from your question - if you've got a judgment, have you considered selling it to or making an arrangement with a debt collecter?
does anyone know how much a collections attorney/debt collector would charge? is it percentage of the collected amount? or is it a rate that just comes out of the collected amount? (i guess it could be either depending on the company/guy?) I'm hesitant to go that route because i've done so much on my own. I don't want to sign over 1/3 of my judgement at this point, and all he needs to do is file a few forms that i could just do myself if i could figure out which ones.
I would totally pay for an hour of a lawyer, who knew what he was doing's, time, unfortunately the lawyer friends i have don't know anybody that does this, and the one recommendation i've gotten seems not to know either, but is fully willing to go the route that gets him the most billable hours it seems. He said just move forward, which will cost me money for the auction and probably net me the same result if i started over with another property... that seems unwise.
A debt collector will either buy it from you and take it from there, at maybe $0.10 on the dollar, or agree to split the proceeds with you, if any. They don't normally like to do these things for one-off individual debts, but in this case, where you have a judgment, they might be willing to make an exception because of the confirmed debt owed.
Weee he's probably going to declare bankruptcy soon then. Maybe put himself into chapter 13 and pay you nothing.
i am very worried he might do that Bowen.