Deltona, FL asked in Real Estate Law and Collections for Florida

Q: Can a judgment against an individual be attached to a property in an llc they own?

I have a judgment against me personally from 10 years ago (yes he renewed it). Since then I bought a property in an llc name. I'm now I'm refinancing and this judgment came up. The underwriter said it must be paid first. I don't understand.

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4 Lawyer Answers
Barry W. Kaufman
Barry W. Kaufman
Answered
  • Collections Lawyer
  • Jacksonville, FL
  • Licensed in Florida

A: When a judgment is recorded, the judgment attaches to the ownership interest in real property of the judgment debtor. You'll have to ask the underwriter these questions. Is it possible that the creditor recorded a lien against your LLC? Sure, it's possible, but unlikely. Otherwise, seek assistance of counsel to resolve the matter.

Anthony M. Avery
Anthony M. Avery
PREMIUM
Answered

A: Apparently you did not set up the LLC correctly, as there are numerous ways to keep your ownership private. The Judgment Creditor can still examine you under Oath and discover your interest in the LLC. It is personal property that can be executed upon, which owns the real property. Find another lender and consult with a very competent FL attorney on what actions to take in the future.

Charles M.  Baron
Charles M. Baron
Answered
  • Collections Lawyer
  • Hollywood, FL
  • Licensed in Florida

A: A judgment against you personally is not, in itself, a judgment against a corporate/llc entity in which you have an interest. The potential problem for you, though, is the Florida Uniform Fraudulent Transfer Act, which I'm guessing is the reason for the underwriter's concern. If you refuse to pay a judgment and transfer your personal funds (which you could have used to pay the judgment) into another account of any kind (an entity account or even another person's account), that might be viewed as fraud against the judgment holder. (The timing of the transfer is the main issue.) The judgment holder can complain to the court that you played a shell game for the purpose of cheating the holder out of their funds and therefore ask the court to order that the "shelled" funds become available for collection. Not saying you played that game, but that's probably what the underwriter is concerned about. You can of course ask the underwriter if that's the reason. If the judgment amount would be a gigantic problem for you, consult a bankruptcy attorney.

Terrence H Thorgaard
Terrence H Thorgaard
Answered
  • Freeeport, FL
  • Licensed in Florida

A: If the judgment was recorded, it constitutes a lien against all your real property. Also, the judgment creditor can execute against all non-exempt property owned by you. That would include the LLC and the property owned by it.

Anthony M. Avery agrees with this answer

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