The legal world has its own language few people outside of it thoroughly understand. Take civil litigation and judgment collection. One of the more obscure terms in that realm is non-homestead property. Do you know what it means? Do you know why it matters to judgment collection?
A related term is ‘homestead exemption’. If you get a break on your property taxes through a local homestead exemption, you might have a pretty good idea of what non-homestead property is in a judgment collection scenario. If not, no worries. This post will explain everything.
When Judgments Involve Money
Nearly every civil judgment result in some sort of monetary transaction for the simple fact that the losing party is usually forced to pay the winning party’s legal bills. But if that is the only money changing hands, the judgment itself is considered non-monetary.
By contrast, a monetary judgment includes some sort of financial award. A good example is a case involving a remodeling contractor who takes a customer to court for not paying their bill in full. The contractor insists he is owed every penny while the customer maintains his right to withhold a portion of payment due to unsatisfactory work.
Assuming the court finds in favor of the contractor, a monetary judgment is entered on his behalf. The customer must now pay a monetary award that includes the past due balance, the contractor’s legal fees, interest payments, and any administrative fees the contractor would normally assess for late payment.
When a Debtor Doesn’t Pay
When a monetary award is involved, the winning party becomes the judgment creditor. The loser becomes the judgment debtor. What happens when debtors do not pay? Some creditors keep trying to collect on their own or turn things over to their attorneys. Others hire specialized judgment collection agencies like Salt Lake City’s Judgment Collectors.
When Judgment Collectors is brought in, one of the first things the team does is begin a property search. The agency wants to know if the debtor owns any property that can be leveraged for payment. A property can be leveraged in one of two ways:
- Property Lien – A lien can be placed on the property, preventing the owner from selling or otherwise disposing of it without paying his debt.
- Property Seizure – Property can be seized and sold to satisfy an outstanding judgment. But not all property is subject to seizure.
This is where non-homestead property comes into play. Some states fully restrict a creditor’s ability to seize a debtor’s primary residence – otherwise known as their homestead. Other states protect a certain value of the debtor’s primary residence. Any value above and beyond can be leveraged for payment.
Something Other Than a Primary Residence
If a homestead property is a debtor’s primary residence, a non-homestead property is any other real estate the person owns. The debtor’s vacation home on the east coast would be a non-homestead property because he does not live there full-time. Other examples of non-homestead properties include:…
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