If you have a judgement against you does that keep you from selling your home and buying another one?

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If you have a judgement against you does that keep you from selling your home and buying another one?

Asked on October 30, 2012 under Real Estate Law, Texas

Answers:

B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

A judgment against you does not per se keep you from selling your home and buying a new one... but it can impact the process.

If the creditor files a lien agaisnt your home, then you will need to ask for enough proceeds from the sale to cover your regular mortgage and the lien. If you don't pay off the lien, then the title cannot pass to the seller-- which will hault the sell of the home.

If the creditor does not file a lien against your house, the judgment can still affect your credit report because it's an unpaid debt.  Because of poor lending practices that lead a crash in housing industry, lenders have tightened up their requirements for extending loans.  The fact that you have an unpaid judgment could influence their decision on whether or not to extend you the credit to purchase a new home.  If credit is not an issue, then this will not affect you. 

Alternatively, if there is a judgment, but it has been paid, then the effects are also minimized. 


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