Remodeling with stolen funds

[Seattle2015]

Jurisdiction

Washington

I invested a large sum of money into a rehab but a large portion of the money was used by the defendant to remodel his own personal residence instead of the intended property.
In a Washington State civil case, I have won a large judgement but the defendants have no liquid assets. If their personal residence where these funds were used for remodeling has a large amount of equity, can this property be used in the judgement such as forcing a second mortgage or foreclosing to get my money back?

 

[Tax Counsel]

If their personal residence where these funds were used for remodeling has a large amount of equity, can this property be used in the judgement such as forcing a second mortgage or foreclosing to get my money back?

Every state allows a certain portion of a persons home to be exempt from judgment creditors. In most states this is known as a homestead exemption. (This is different from a reduction in real estate property taxes that some states have which also might be called a homestead exemption.) In Washington state, the homestead exemption protects the lesser of the value of the property or $125,000 of the value of the property. See Revised Code of Washington (RCW) section 6.13.030.

If the property is worth at least $125,000 then what this means is that if you properly record your judgment as a lien against the property, your lien will attach to whatever equity there is over the sum of: the amount outstanding on the mortgage (if there is one) + $125,000 + the amount of other liens that have priority over yours.

 

[Seattle2015]

The judgement is expected to be over $500k. Their home is worth over $600k and I believe they owe less than $100k which leave approx. $500k equity. They have lived in this house for 20 years and they are both around 60 years old. I am also around the same age. If a lien if filed on the home and they live in the home until they die, this means I will never collect my money. Are there ways to force a second mortgage or sale of the property to get my money? Thank you for your response.

 

[Tax Counsel]

Are there ways to force a second mortgage or sale of the property to get my money? Thank you for your response.

A mortgage is a simply a type of lien on the property, just one that the property owner agreed to. Your judgment, when properly recorded, is a lien on the property, too, the difference being that your lien was awarded by a court rather than a consensual lien. So you can think of your lien as much like a second mortgage once you've recorded it.

See a Washington lawyer about foreclosing your lien to force the sale of the property and get your money. When a property subject to a judgment lien is the debtor's homestead there are some limitations on that. At the very least you certainly want to promptly record your judgment to ensure it becomes a lien on the home while you work out how and when to get the money out of it.

 

[Highwayman]

The judgement is expected to be over $500k.

Expected?? You said you already won the judgment.

 

[Seattle2015]

Sorry, I misspoke, I meant we have already won the case based on embezzled funds during discovery phase and are expecting a judgement around that amount based on my investment.

 

[army judge]

Sorry, I misspoke, I meant we have already won the case based on embezzled funds during discovery phase and are expecting a judgement around that amount based on my investment.

I suggest you consider retaining your current attorney or hiring another attorney to lead the effort required to enforce your judgment.

 

[Seattle2015]

Thank you for your suggestion. I appreciate all the advise.