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I have had an offer equal to the appraised value on my aunt's home. As executrix of her estate, I am concerned that there is a lien on the property for a credit card debt she accrued, of which the purchaser is aware. There is not enough money in the estate bank account to pay this off. I have sent the estate attorney numerous emails and received no advice on how to proceed. The purchaser suggested I sell for the apprised amount minus the lien value (e.g. asking price is $25,000 less the $9,000 lien = $16,000 selling price). Any other suggestions?

Check with your local registrar's office. In most areas the info is on line.

Normally credit cards are unsecured so unless they filed something against the estate there should not be an issue.

IMHO you need to make an appt and visit the lawyer in person. Many professional people are not going to respond to an email concerning a matter like this.

The buyer again IMHO also needs a real estate lawyer advising her. We are dealing with a similar matter and have a lawyer advising us each step of the way. There is no way I would expect him to conduct business with us via email. We make appts and go to his office.

As mentioned above, credit card debt is not secured by the property. Sounds like the buyer just wants to get the home for 9,000 less.

I agree, Visit the attorney, via an appointment and in person!

Thanks, everyone, for responding. I have an appt. Wednesday next week with the estate attorney.

quote:

Originally posted by weakestlink:
I have had an offer equal to the appraised value on my aunt's home. As executrix of her estate, I am concerned that there is a lien on the property for a credit card debt she accrued, of which the purchaser is aware. There is not enough money in the estate bank account to pay this off. I have sent the estate attorney numerous emails and received no advice on how to proceed. The purchaser suggested I sell for the apprised amount minus the lien value (e.g. asking price is $25,000 less the $9,000 lien = $16,000 selling price). Any other suggestions?

???? Say what?! First of all, any credit card debt your aunt may have accrued is simply an unsecured debt of the estate and is CERTAINLY NOT A LIEN against the real property unless a civil suit was instituted prior to your aunt's death which proceeded to judgment adverse to her and recorded as a judgment lien.

I am astonished at the fact that you are talking to the "potential purchaser" about reducing the purchase price (which is ridiculous, byw - what would that accomplish as the debt/lien would still exist?) instead of talking to your attorney. And, no, e-mails don't count ~ you are asking for professional advice and, yes, you will have to pay for it. Glad you have an appointment next Wednesday....

Now, seriously, make a list of ALL of the questions you have and make sure to address each one during this appointment ~ very important. Don't leave his office until each and every issue has been answered to your satisfaction or you have been assured of follow-up regarding issues of which the attorney wasn't aware ~ seems as if you have been trying to handle both estates on your own and it's not working given how long you have been struggling with both estates.

Time to sit down with your attorney, pay for the time and get these estates closed. Wishing you the best - you deserve it.

Edited to Add: If the credit card debt is, in fact, a valid lien against the real property that is very easy to handle. You DON'T reduce the purchase price; instead you simply instruct the title company to pay off the lien at closing; just as they would do if the lien was a prior mortgage. Problem solved.

This message has been edited. Last edited by: Idaho Resident,

Best wishes and let us know what the attorney said.

WL, I would ignore any of the purchaser's suggestions. They'll receive the property free and clear of all liens and encumbrances. Has nothing to do with them or the property's fmv, IMHO.

State laws control probate - obviously, your attorney will explain the relevant statutes. If the lien and/or debt is valid, it will either be paid out of the proceeds at close of escrow or attach to the proceeds and be paid after any higher priority claims, e.g. priority taxes.

If I were you, I would ask your attorney if court approval is necessary to sell the property free and clear, allowing any liens to attach to the proceeds. That way, you can be 100% certain that all necessary taxes and/or other priority liens are paid before disbursing funds to the bank/credit card. In addition, it gives you time to review all claims and perform any necessary reconciliations or file objections to invalid/overstated claims, if applicable.

Be very careful to pay claims in the order of their priority, in accordance with state law. Executors can incur personal liability.

All info is JMHO. Sorry for your loss and good luck wrapping up the estate -

P.S. Did the creditor obtain a judgement? Lien valid? If you haven't verified it, that's possibly another reason to ask the court to allow you to sell the property free and clear. It's definitely preferable, IMHO, than allowing an invalid claim to be paid out of the proceeds at close of escrow and then possibly discovering priority tax claims at a later date.

This message has been edited. Last edited by: BearCat49,

In addition, there have been collection notices in my aunt's mail in regard to the credit card debt. I went to the County Seat and did a lien search on my own and the credit card lien was registered there.

WL, it's extremely important to avoid assumptions when working on estates, IMHO. The fact that something has been filed or a billing statement mailed doesn't mean the underlying debt's valid. Unfortunately, everything must be verified with your aunt's records and that takes time.

For example, what if your aunt paid off this credit card but was unaware she needed to require a release of lien? Believe me, many collectors will continue billing someone, even if the debt was previously paid or the statute of limitations has expired. Especially if the debtor is elderly or they know an executor who may not be aware of the situation or check the relevant records is attempting to finalize probate -

Selling the property free and clear of all liens and encumbrances with any valid liens to attach to the proceeds will both allow you to quickly finalize the sale and give you the additional time to verify all claims against the estate and their priority.

It's JMHO, again and good luck with your meeting -

quote:

Originally posted by Charming:
Check with your local registrar's office. In most areas the info is on line.

Normally credit cards are unsecured so unless they filed something against the estate there should not be an issue.

I think Charming is right you should go there.

Weakestlink, Hope you had a productive appointment with your attorney on Wednesday ~ how did it go? Did you get the answers you needed?

All the estate's attorney said was that he's "working on it" and it could take some time (i.e. billable hours). I feel stymied - I am anxious to sell and from my standpoint the attorney seems to be dragging his heels, However, to be fair to him, it's probably not his highest priority case.

It's like a Catch-22, there's no money in the estate to pay off the judgment and I can't sell until the judgment is paid and settled.

Are probate fees in this particular state (not sure where your aunt's property was located) limited to a % of estate assets? They typically are, BTW. So, billable hours don't usually apply. That said, it's possible your file is not being addressed, if it's a relatively small estate. If he's too busy, you may want to consider working with someone else.

If your attorney files a simple motion to sell, using the method I described above, it would be extremely rare for a judgement creditor to object, IMHO. They want to get paid.

Using your aunt's records (not creditor statements), were you able to verify that the bill/judgement amount remains unpaid?

Again, it's JMHO and good luck!

This message has been edited. Last edited by: BearCat49,

You may want to consult with another attorney. In an estate were the only asset is real estate, it is typically sold to the "best" offer and the proceeds pay 1)the existing mortgage and 2)any remaining debt. Anyone can file a lien against property but there are penalties for filing frivolous liens. In my 20+ years in Real Estate I have never seen nor heard of a credit card company filing a lien against real estate. Just for some further clarification you may want to read some on this site ( http://community.lawyers.com/forums/t/117098.aspx) prior to speaking again with your attorney.

quote:

Originally posted by weakestlink:

It's like a Catch-22, there's no money in the estate to pay off the judgment and I can't sell until the judgment is paid and settled.

weakestlink, That is simply not true. Real estate is sold everyday with various liens and/or judgments recorded against it and paid off at closing. You need to get some better professional advice than what you have received to date per your postings. Good luck....