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Debtor Creditor Rights
University of Iowa School of Law
Bauer, Patrick B.

 
Debt Transactions-2014-Bauer
 
 
Collection Remedies
1)      Post-Judgment Remedies-Real Estate
a)      Judgment Liens
i)        General Dimension of the Judgment Lien
(1)   Duration
(a)    Judgments of state district and appellate courts and fed district and circuit courts can be liens on real estate owned by the judgment debtor for a period of 10 years from the date of the judgment…
(b)   A special limitations period exists for judgment on promissory obligations secured by a mortgage or deed of trust of real estate where such security is not foreclosed. In such circumstances, the judgment ceases to have any force or effect, except as a setoff or counterclaim, after two years from the date of its rendition, and the lien of any such judgment likewise lapses at the time.
(2)   Scope
(a)    The judgment lien extends to all real estate owned by the Judgment Debtor. By statutory definition, “real estate” includes “lands, tenements, hereditaments, and all rights thereto and interest therein, equitable as well as legal.
(3)   Attachment
(a)    The judgment of State District Courts and Fed District and Circuit courts become liens upon real estate of the judgment debtor in the county in which they are rendered on the date they are entered in the clerk’s judgment docket and lien index. In all other counties, such judgments become liens upon real estate of the judgment debtor on the date an attested copy of the judgment is filed with the state district court clerk of the county in wihc such real estate lies
(b)   The judgment of state appellate courts do not become liens upon real estate of the judgment debtor until an attested copy therof is filed with the state district court clerk of the county in which such real estate lies.
(4)   After-Acquired Property
(a)    A judgment will become a lien upon any real estate which the judgment debtor may acquire in any county in which the judgment is entered or filed if sich property is acquired whin the period in which the judgment is effective as a lien(see above 10 years). If more than one judgment is so effective at the time the real estate is acquired by the judgment debtor, the resulting liens are of equal priority and a levy and sale of the real estate under one such lien will pass title subject to all other such liens.
(5)   Alimony and support decrees
(a)    See pg. 18
(6)   Execution Lien Distinguished
(a)    A writ of execution may be issued upon land for a period of 20 years.(applies if the judgment lien did not automatically attach)
ii)      Interest Reached by the Judgment Lien
(1)   Interests Reached
(a)    All real estate- leaseholds, joint tenancy interests, and the equitable title of a contract for deed vendee
(2)   Interests not Reached
(a)    Real estate that falls within the homestead exemption, real estate previously conveyed in fraud of creditors(?), or interests in real estate which are characterized as personalty, such as the interests of a mortgage, a contract for deed vendor, or the owner of an option to purchase real estate
(3)   Non-Record Interests
(a)    A bona fide purchaser from a record owner who would take free of a judgment debtor’s non-record interest would likewise take free of the judgment lien thereon.
(b)   Where the judgment debtor’s interest is not of record, the judgment creditor must commence an equitable action against the judgment debtor and the record owner to subject the judgment debtor’s non-record interest to the satisfaction of the judgment in order to establish the judgment lien as against subsequent purchasers.
iii)    Enforcement of the Judgment Lien
(1)   General Execution
(a)    The judgment lien is enforce by levy and sale under a writ of general execution. An execution sale outside of the period in which the judgment is effective as a lien will result in the purchaser obtaining priority only form the date of levy
(b)   Although it has been held that an equitable proceeding to enforce a judgment lien will not be entertained in the absence of a showing that the legal process of ley and sale is inadequate, such a proceeding may be available where the extent or existence of the lien is uncertain.
(2)   Levy
(a)    The sheriff levies the execution by making an entry of specified content in the encumbrance book.
(b)   The sheriff is under duyt to limit the levy to “such property of the judgment debtor as is likely to bring the exact amount of the execution, as nearly practicable, and a levy in violation of that duty may provide a basis for setting aside a subsequent execution sale of the real estate encompassed by such levy.
iv)    Cases
(1)   Chader v. Wilkins (Dad and Dead Wife)
(a)    You may obtain a judgment on a judgment to extend the life of it
(b)   The judgment lien attaches as soon as the property is acquired so long as it is within 10 years of the judgment(even if judgment is made from a prior judgment)
(2)   Lakin v. C.H. McCormick
(a)    Must sell land within the fixed period.
(b)   The life of the lien was 10 years, Both levy and sale of the property must occur within that time or the rights afforded by the lien are lost
(3)   Denegre v. Haun
(a)    Filing for a judgment on a judgment is a new judgment, and thus you loose anything that the previous judgment held onto
(4)   Whitters v. Neal
(a)    Must renew an judgment lien by filing a separate action
(b)   While the judgment lien is valid only for 10 years, the judgment itself would stand for 20 years. (614.1)
(i)     Generallyt he right to issue an execution and levy upon real estate exists as long as the judgment remains unpaied and unbarred.
(c)    Proper procedure is to sue on the original judgment and obtain a new lient
(d)   Can not obtain by motion.
2)      The Homestead Exemption
a)      The Homestead’s Basic Dimen

furnished exclusively for the improvement of the homestead, thus a debt for materials used in improving the homestead may be enforced against the homestead notwithstanding the fact that the creditor’s right to enforce such a debt as a mechanic’s lien has been lost by the running of the SOL.
ii)      Equitable liens have been imposed on homesteads where fraudulently obtained or misappropriated funds have been used to pay off the wrongdoer’s homestead
iii)    State homestead exemptions do not protect against federal tax liabilities
e)      Cases
i)        Lamb v. Shays
(1)   A lien of judgment does not attach to an exempt property (homestead).
ii)      In re Marriage of McMarrow
(1)   Child support obligation occur at the birth, not at the filing of judgment.
3)      Execution Sales
a)      Procedure Prior to Sale
i)        Public Notice
(1)   Sheriff must give notice of the time and place of the execution sale of real estate 4 weeks prior, in 3 public places(one dc court), and two weekly publications in a newspaper printed int eh county.
(2)   Failure of such notice does not affect the validity of the execution sale, but does render sheriff liable for any actual damages sustained by either the execution creditor or execution debtor + penalty of $100 payable to execution debtor, conditioned upon the latter’s sufferance of some actual damages.
ii)      Notice to Debtor in Possession
(1)   Sheriff must personally serve an execution debtor who is in actual occupation and possession of any part of the real estate to be sold with written notice of the fact of execution levy and the time and place of the execution sale at least 20 days prior
(2)   Failure allows the execution debtor to have the sale set aside on a motion made within 90 days thereof.
iii)    Platting of Homestead
(1)   If any part of the real estate to be sold falls within the homestead exemption and has not yet been platted as such, Sheriff must give owner and spouse written notice that they must plat and record  within 10 days of such notice. Otherwise the Sheriff is  to proceed to select, plat, and record the same on their behalf .
(2)   If the sheriff fails to so plat and record the exempt homestead and proceeds to sell the same in violation of the exemption, the owener/spouse may have the entire sale set aside.