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I own a home in Wisconsin with 2 friends and a credit card company has received a judgment against me and subsequently a lien on the property. I have 2 questions.
1) Am I able to claim the homestead exemption in Wisconsin which would protect $40,000 of our equity in the house from creditors? Do you need to file for bankruptcy to claim this?
2) Since there are multiple owners of the house, will the lien affect the other owners profits when we sell the house assuming that the lien imposed on the house is more than my portion of the proceeds that I would receive at close?

Optional Information:
Milwaukee, Wisconsin

Already Tried:
Negotiating with the law firm that placed a lien on the house. Researchi online about liens as they pertain to multiple owners of a property

Customer (name blocked for privacy)

Status: Closed Value: $15

1) Am I able to claim the homestead exemption in Wisconsin which would protect $40,000 of our equity in the house from creditors? Do you need to file for bankruptcy to claim this?

If you have a Judgement against you and it is filed in the county where you own a home, when you sell that home, you would likely have to pay the judgement before you can qualify for credit to purchase a new home. That is true whether it is homesteaded or not. If the lien is not secured on the home based on a contract and is based ona judgement alone, it cannot be forcelosed on a home that is homesteaded.

2) Since there are multiple owners of the house, will the lien affect the other owners profits when we sell the house assuming that the lien imposed on the house is more than my portion of the proceeds that I would receive at close?

No. It impacts your interest alone and your ability to buy a new house.

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The information provided is general in nature only and should not be construed as legal advice or to create an attorney-client relationship. You should always consult with a lawyer in your state

Reply to Lawmoe's Post: 1)ok so you are saying that the homestead exemption can be claimed without filing for bankruptcy? I plan on renting moving in with a friend after I sell my home for a while until I get back on my feet so I wont need to purchase a new home right away. If the homestead exemption is claimed without filing for bankruptcy what will become of the lien? will I have to goto court to negotiate payment?

2)Also if the lien will affect only my interest in the house alone and say the lien is in the amount of $12,000 and my portion of the proceeds at close is only $9000 .... what happens to the missing
$3000 in this case??

If it is a homestead, the lien cannot be foreclosed regardless of bankruptcy if the contract did not oriveide a lien on the homestead.

In bankruptcy, if you have a homestead, you may be able to claim the entire value as an exemption (I believe it is up to $250,000 but I am not an expert on that). If there is no bankruptcy, it is likely te lien would be paid upon a sale.

If you sell and your interest does not cover the lien, the creditor still holds a judgement. It just cannot be executed on the home for the full amount. It survives, however, and may be used to garnish other assets

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Reply to Lawmoe's Post: ok sorry for all the questions. I believe my 2nd question is fully answered and it is contrary to what I've heard from my realator. I was told basically that the lien is against the property and not the individual so it would cause the other owners to potentially lose money at close if my interest in the property was less than that of the lien. I am glad to hear that the other owners are not subject to this.

As far as the first question goes. I have an accepted offer on my house so I'm looking to close soon however walking away with little or no money right now would really kill me as I am inbetween jobs right now and have $40,000 in student loans that I need to make payments on. I do have a job but I'm not making nearly as much as I was. So given this situation is it possible for me to do "something" (ie claim the homestead exemption) in order to receive some or all of the money back at close and reach a payment agreement for paying back the judgment? Or some other agreement like wage garnishment

Thanks again this really should be my last question :)

I should mention that I am not really considering bankruptcy to be an option. If at all possible I would like to receive money at close without filing for bankruptcy

If the judgement is for a debt you owe and it was not secured on the property, it does not impact other owners property interests.

Claiming a homestead exemption with other owners there would be difficult. You are not the owner in fee simple (all rights). As a result, I do not believe you can claim homestead. That, however, is a tax attorney question.

You can always negotiate a payoff.

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