2. A surety bond is a contract in which the surety promises to the judgment creditor if the judgment debtor loses the appeal. The surety will pay the full amount plus interest that has accrued during the appeal. A surety must be a person or business that can demonstrate that it has sufficient assets to pay the amount assured. In contrast, a property bond is when the judgment debtor posts his/her owners’ equity in real property as a bond. The debtor executes a mortgage or deed of trust to the trustee to convey real property to the clerk as a stay bond.
4. When property is exempt from execution, the judgment creditor cannot seize and sell that property to satisfy the judgment. States put these rules in place as a matter of public policy. Leaving a debtor destitute would often result in the debtor becoming a ward of the state, and is not in the states interest. If final judgment is entered in a federal court, state property exemption laws are generally used to enforce judgment. When a final judgment is entered in one state and the debtor owns property in another state, the law of the state where the property is located will control the exemption issue.
5. A homestead exemption allows the judgment debtor to retain some or all owner’s equity in the family home or domicile. If a debtor’s equity in the homestead exceeds the applicable homestead exemption, the executing creditor can force the property sold, pay the debtor the homestead amount and apply the rest to the debt. In some states the constitutional homestead exemption is unlimited in dollar amount, though subject to certain acreage limits. In other states the homestead exemption is limited to owners’ equity of a specific dollar amount. Mechanic’s and materialman’s liens filed against the property renders the homestead exemption as inapplicable in other states.
6. Federal laws provide that various types of federal government benefits are exempt from execution on final judgments rendered in either state or federal court. The following income source exemptions include but are not limited to: social security benefits; veterans benefits; civil service and federal retirement benefits; military annuities and survivors benefits, etc. In regards to personal property, common exemptions include but are not limited to: household furniture and vehicles, both up to a designated dollar amount; equipment or tools used in a trade or business; necessary and proper clothing; personal possessions such as family photos, bible; livestock, etc.
8. A tenancy by entireties is a form of concurrent ownership of property that pertains to a husband and wife only. A tenancy in common is a form of concurrent ownership in which persons have undivided interest in property owned. Right of survivorship in the property is applicable to a tenancy in by entireties but not in a tenancy in common. In a joint tenancy there is also a right of survivorship as in a tenancy by entireties. The difference between the two is that prior to death, a joint tenant may transfer interest in the property by sale, pledge or gift. This cannot happen in a tenancy by entireties.
9. A trust is an arrangement whereby the owner of the property conveys title in the property to a designated trustee to be held by the trustee for the benefit of another party called the trust beneficiary. The first main party of a trust is the owner of the property, often called the grantor, trustor, or settlor. The second party is the trustee, who holds title for the benefit of the third party, called the beneficiary.
10. A spendthrift trust is established to provide certain benefits to a designated beneficiary from time to time that prohibits the beneficiary from selling or pledging as security any of the trust principal or any future distributions to be received from the trust. An asset protection trust is an arrangement whereby the settlor can convey his own property into trust, name himself the beneficiary the to receive distributions of principal or interest as proscribed in the trust document, and yet prevent his creditors from seizing trust assets not yet distributed.