I would also ensure the Mortgage and Note provide you with the option to pursue deficiency judgement against any borrower who defaults.  

(Or better yet a confessed judgement for the money owed)  Realistically don't expect any money and be thankful she want to leave on her own. 

@Joe VilleneuveI do recognize that the LLC strategy is a viable one but I for one would not feel comfortable with being on the buying side of a transaction When I purchase a property directly, I have the some protection with the purchase of title insuranceFor instance, any lien, judgement or other encumbrance must be filed in the county that the property is located.  

I agree she is judgement proof.

I did not know that the County won't let them open up a rent escrow if they have a judgement against them.

She was 16 when it happened.The first court granted a summary judgement to the Landlord.

Another buyer that essentially did the same thing as #1, but after the first extension, he told us about the judgement that he was trying to clear and said he was confident it would be done in the next week and that the loan would be approved.

If you don't act negligently, you greatly reduce your chances of ever having someone win a judgement against you that would be able to effect your home.I currently do give my home address to my tenants.

The LLC's assets are at risk if you act negligently (and the judgement goes over the insurance limits), but the point is to create a firewall between the LLC and the rest of your assets so the creditor can't go after them.

Theoretically they could sue you for payment, win a judgement and file a lein against the property.Your best approach would be to contact the hospital and assuming you did not have any insurance, offer a payment plan for 50% of the bill (for some reason hospitals charge higher for service to non-insured patients and insurances (including medicare) pay at a mush lower rate).