Crazy ex wife wants to put lien on property

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Crazy ex wife wants to put lien on property

Asury Johnson
Rental Property Investor · Clarksville, TN · Member since 2017 · 73 posts · 99 votes
I have a partner who went through a nasty divorce right before his investing business took off. The judge requested that my partner pay all court fees and her attorney fees, totaling in over $20k. My partner's lawyer put in a motion to appeal it. (Not sure if this is the right terminology) while he's waiting for his court date, the ex's attorney puts a lien on his properties which are all under his S Corp and not personal name. I know this a little crazy and of topic, but now he's freaked out and doesn't want anything in his name or business. He thought the whole purpose of having an entity was to keep business separate from personal.
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
7y

It seems he chose the wrong entity type for asset protection. To my knowledge there is no charging order protection for S corps like there is for LLCs. Better win the appeal or be prepared to pay up and keep the corp out of this.

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  • Matt Burns
    Cary, NC · Member since 2011 · 34 posts · 16 votes
    7y

    For liability, he was correct for creating a corporation. But any assets (equity) he acquired while they were married are likely a matter to be settled in the divorce. 

    My dad said; If you want to keep your money stay out of jail and don't get divorced. 

    Hope it gets resolved quick!

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  • Asury Johnson
    OP
    Rental Property Investor · Clarksville, TN · Member since 2017 · 73 posts · 99 votes
    7y
    @Matt Burns he acquired his assets after the divorce. That's what's crazy
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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    Yeah, but he likely acquired them with cash from when he was married.  He would have to talk to an attorney to see if the liens are legitimate.  BTW, the court says he owes her the money...her trying to collect doesn’t make her crazy.

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  • Asury Johnson
    OP
    Rental Property Investor · Clarksville, TN · Member since 2017 · 73 posts · 99 votes
    7y
    @Wayne Brooks he didn't pay cash. They're financed under business name. The court says he owes her money, not the business. That's what we're confused about. She's coming after assets that aren't in his name and that were acquired after divorce was finalized. Anyone can put a lien on anything, didn't mean it's justified. Our attorney is in the process of squashing the liens since they're not in his personal name.
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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    7y

    It seems he chose the wrong entity type for asset protection. To my knowledge there is no charging order protection for S corps like there is for LLCs. Better win the appeal or be prepared to pay up and keep the corp out of this.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    @Asury Johnson I agree it doesn’t seem valid that her attorney could place a lien on the Corp Property......he likely Could place a lien against the husband’s Owneship Interest In The Property(essentially the equity, which is what I meant by the husband’s cash), but not against the property itself.....could end up in a forced sale/same result. 

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  • Angela Smith
    Member since 2018 · 161 posts · 152 votes
    7y
    If this property was purchased with money that was a part of the marriage then he ex has a legitimate claim. I would recommend you lean hard on your partner to demand some information here. I expect there may be parts of the story you aren't privy too.
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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    7y

    As a judgment creditor the goal is to find the debtor's assets. The assets here are the ex-hubby's shares in the S corp, not the real estate... and yes those shares are attachable if solely owned by the debtor. This is not a divorce issue... although the points about marital assets are good points in that context, they are not relevant. This is a collection issue.

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  • Asury Johnson
    OP
    Rental Property Investor · Clarksville, TN · Member since 2017 · 73 posts · 99 votes
    7y
    @Angela Smith as stated in previous post, no assets were purchased while married. They were purchased after. Which is why we're so confused and he's going back to court about having these liens removed. Also, they are under entity name, not personal name. My real question is asset protection real, if this kind of stuff can happen?
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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    If the court ordered the money due, it doesn’t matter what money was used, his Interest in the properties is subject to attack, as well as any other asset he owns......but I agree, not a lien on the asset Itself since it’s in an entity.

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