An experienced judgment collection agent can tell you stories about how debtors work extremely hard to hide their real estate holdings. Some debtors will try to transfer real estate to a family member or friend. Others will try to initiate a straw sale. Regardless, judgment debtors have every motivation to do what they do, despite it being illegal in most cases.
If you don’t know what that reason is, look no further than celebrity Nicki Minaj and husband Kenneth Petty. The two face the prospect of losing a $20 million California mansion because they have failed to pay an outstanding money judgment of just over $500k. There is a very real possibility that the home will be seized and sold to cover their debt.
A Legally Recognized Debt
In addition to being a court action, a money judgment is a legally recognized debt. In Minaj’s case, the debt stems from a lawsuit filed by a former security guard a few years back. The guard sued over an incident that occurred during the rapper’s 2019 Germany tour.
Minaj and her husband were ordered to pay the security guard $503k plus interest and other costs. To date, the judgment has not been paid. So the security guard is asking the court for a writ of execution against the couple’s Hidden Hills home.
If the court agrees, it should not take long for local authorities to seize the property. With an estimated value of at least $20 million, the property has more than enough value to pay the outstanding judgment and additional interest and fees. Any remaining amounts would go to Minaj and Petty.
How It’s Possible
Losing the home probably wouldn’t be a big deal to the power couple, especially since they would likely see $19 million of the proceeds go to them. They can turn around and buy another California mansion. But for someone with more modest assets, losing a second home could be financially devastating.
It is all possible because money judgments essentially become secured debts as soon as action is taken against a debtor’s property. That action can be in the form of garnishment, a property lien, or a writ of execution. In the case of a writ of execution, the property in question becomes security for the debt. If the debtor still refuses to pay, the property can be seized and sold.
It should be noted that most states exempt primary residences from writs of execution. This implies that Minaj’s Hidden Hills home is not the home she and her husband live in. As such, it is up for grabs.
Just Find a Way to Pay
The experts at Judgment Collectors, a Utah collection agency that works exclusively on money judgments in nearly a dozen states, say property is the collection agency’s best tool for getting judgment debtors to pay. They also say it’s better for debtors to figure out a way to settle up. Doing so is a lot less stressful than losing a property.
Judgment Collectors once pursued a case against a debtor working very hard to avoid paying. It turns out the debtor had a second home investigators found during a property search. Judgment Collectors initiated action against the home. Rather than lose it, the creditor refinanced the property and paid his debt.
Judgment debtors are not dumb. They know their property could be seized and sold if they refused to pay. That’s why they try so hard to hide things like vacation homes and rental properties. But judgment collectors aren’t dumb either. They know how to find debtor-owned real estate.
