How to liquidate a FHL™

Day 1—30-day demand letter sent

Starting on day 31—law suit filed & defendant served

Depending on the jurisdiction, defendant can be served by various methods including certified mail, personal service, sheriff’s service or ordinary mail service Defendant has the opportunity to do one (1) of the following:

1) File an answer—with defenses (5%)

Pre-trial, trial and motions will follow, for which you will need to provide a witness and evidence.

The presiding court may enter a judgment.

2) File an answer—without defense or general denial (5%)

Counsel (you or your attorney) will file a motion for Summary Judgment with supporting affidavits. The defendant will have an opportunity to respond to the motion. The judge will then rule on the motions, and the presiding court may enter a judgment If you are unsuccessful obtaining a summary judgment, you may return to step one above.

3) Not respond within the specified time (70%)

In most jurisdictions, counsel will file a motion for Default Judgment with affidavits. The judge will ensure that service was proper and the defendant filed no answer. The presiding court will generally enter a judgment.

4) Contact the attorney of record with a willingness to enter into a repayment agreement (15%)

Counsel will negotiate the repayment plan with the defendant and will then contact you for authority to accept the plan. Counsel will have the defendant sign an Agreed Judgment that details the repayment plan. Counsel will then file the Agreed Judgment with the court.

5) Contact his/her own attorney, who will offer a settlement (5%)

Counsel will negotiate the settlement offer and contact you for authority to accept the offer.

If you accept the offer, your attorney will prepare the Settlement in Full letter and fax it to the debtor.

If declined, counsel will suggest you make a counteroffer.

Settlement should be received from the debtor within 30 days of the acceptance of the offer.

Lawsuit will be dismissed with prejudice after the funds have been received and cleared.

Starting on day 60 (approx)—file for judgment

One of the following types of judgments could be rendered:

Default judgment—the defendant fails to file an answer within the specified time limits.

Summary judgment—the plaintiff or defendant may file a motion with the court stating that there are no material issues to try before the court and, therefore, judgment should be entered in favor of the moving party.

Obtained judgment—judgment is obtained at trial.

Agreed judgment—the defendant enters into a repayment agreement for the full amount and the plaintiff will not seek post judgment remedies.

Starting on day 70 (approx)—judgment filed & home lien filed

If a Summary Judgment, Default Judgment or Obtained Judgment is rendered, your attorney will file it with the court and also file a home lien on the defendant’s property with the county. This will secure your interest in the property Post-Judgment Liquidation & Remedies:

Settlement

Repayment plan

Debtor exams leading to wage or bank garnishment

Levies on property (eg, auto, boat)

If the debtor sells or refinances the home, the lien will be liquidated

Foreclosure

If the debtor dies, the property enters probate and the lien will be liquidated