The Facts: When I was unable to pay my medical bills, my doctor obtained a money judgment against me. The judgment was docketed in the county clerk’s office a few years ago. My father just passed away and I inherited his house.
The Questions: Can the doctor’s judgment lien attach to the property I am inheriting even though I did not own it when the judgment was obtained? Can the doctor force me to sell the property in order to collect the money I owe him?
The Answer: Unfortunately for you, the answer to both questions is YES. People who obtain money judgments are called judgment creditors and they can collect against the debtor (the person against whom the judgment is docketed) at any time provided the judgment is still enforceable. While the doctor may be able to force a sale in order to collect the amount of his lien, a portion of the value of the house is exempt if you are residing there. In addition, the doctor is only entitled to collect the amount of the debt owed him. If he forces a sale and the proceeds exceed the amount of the judgment lien, you retain the surplus.
How it Works: It is well-settled in New York that immediately upon the death of a property owner, judgments docketed against individuals inheriting the decedent’s real property will attach to that property. The attachment occurs regardless of whether the inheritance is pursuant to a Will or the intestacy statues. In other words, regardless of whether your father died with or without a Will, if you are your father’s only heir, or if he left the property to you in his Will, you immediately became the owner of the property at the time of your father’s death.
If the doctor learns of your inheritance, he may commence an action to foreclose on his lien. While he may be willing to negotiate a settlement for less than the full amount of his lien, the doctor can essentially force you to sell the property unless you are otherwise able to satisfy the judgment. As mentioned above, if you are residing in your father’s house, you may be entitled to a homestead exemption for a portion of the proceeds of the sale. The rest can be applied to the doctor’s lien. If the proceeds are insufficient to satisfy all of the liens, they will remain on record.
With respect to the sale, if someone other than you has been appointed as the executor or administrator of your father’s estate, that person has the authority to sell the property even though title vested in you. Regardless of who actually carries out the sale of the property, if it is sold and the doctor’s judgment is not satisfied, the purchaser takes the property subject to the doctor’s docketed judgment lien.
Given the fact that the doctor is in a position to foreclose on his lien, you need to take the doctor’s judgment seriously. Ignoring a properly filed judgment lien can easily result in costly litigation.
This article first appeared in the October 13, 2011 issue of the Times Beacon Record Newspapers.
Linda M. Toga of The Law Offices of Linda M. Toga, P.C. is an East Setauket, New York attorney with a general law practice focusing on estate planning, real estate, marital planning, small business services and litigation.