A writ of FI FA (writ of fieri facias) is a document that is issued by your local county clerk’s office for the purpose of recording a lien on your house after a creditor obtains a judgment against you. In addition to putting a lien on your house, a Fi Fa can be used to seize your personal assets. A Fi Fa can also be used to perfect a lien on your automobile. Think of it as a monstrous octopus that can put its arms around everything you own.
If you ignore the Fi Fa on your house, it will accrue interest at the judgment rate. In other words, the monstrous octopus will grow larger. Whenever you sell your house, the Fi Fa will have to be paid before ownership can transfer to another person.
The good news is that Chapter 13 and Chapter 7 bankruptcy can be used to avoid a judicial lien to the extent it impairs your exemption. Let me give you an example of a Chatsworth client that was freaking out because they received a copy of a Fi Fa (or writ of fieri facias) in the mail. Lets say that this bankruptcy client from Chatsworth has a house worth $100,000.00. If the Chatsworth client owes 90,000.00, there is equity of $10,000.00. With the Georgia bankruptcy exemptions, all of the equity of the Chatsworth client be exempted. As a result, all of the judicial lien could be completely avoided.
Lets change the scenario for the Chatsworth client. If the house is worth $110,000.00, there is equity of $20,000.00. Assuming the Chatsworth client is single, we would be able to exempt only $10,000.00 of the equity leaving a remainder of $10,000.00. Is this unlucky example, the Chatsworth client would be able to wipe out only the part of the judgment lien that exceeds the $10,000.00 exemption. However, we could file a Chapter 13 and create a plan that pays the unsecured creditors the same amount of equity that is exposed by the lien. In other words, we can save the house from the octopus monster.
As you can see from these examples, it is extremely important to know the value of your house before you file bankruptcy. A great place to get an idea of the current value of your house is your local county tax assessor.
Why would anyone want to wait until the creditor obtains a judgment against you before you consider bankruptcy? Even though its never too late to file bankruptcy, why not take care of the problem before a Fi Fa is issued against you?
3. How much does it cost to file?
4. How do I protect my assets in a Chapter 13 or a Chapter 7 bankruptcy?
5. Should I sign my house over to someone else before I file bankruptcy?