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House Calls: Judgment Problem

Edith Lank on

Edith: Five siblings have a contract to sell their father's house that they inherited. One has a judgment against him. The broker says the house can't close without that judgment being paid off. None of the others want to pay the judgment, because it is more than that sibling's one-fifth share of the sale proceeds.

Is there any way to get around this so the house can close? Everyone wants their money! -- askedith.com

Answer: Never mind the broker; double-check with your attorney or a CPA. I'm not a lawyer, but I believe the judgment can be charged only against that sibling's one-fifth share of the proceeds.

Evidently, that won't yield enough to pay off the full debt. But perhaps the creditor will agree to release that claim on the property in return for collecting at least part of what's owed.

Let me know how it comes out -- I'm interested.

Correction: Medicaid Look Back

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Dear Edith: In your reply to A.J.H., you said the Medicaid look back period is three years. I believe it used to be three years but is now five years. -- B. A., Jr.

Hello, Edith: I just wanted to comment that I believe the look back for Medicaid eligibility is five years, not three. -- C.

Dear Edith: My state does a five-year look back. If a person has transferred real property for less than market value during that five-year look back, he or she may not be eligible for Medicaid for a period of time called a transfer penalty.

In some situations a penalty would not occur. People should reach out to their local department of social services for advice. -- J. H.

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