If you are awarded a judgment in court against a person who owes you money, you are entitled to place a judgment lien on any real estate that the person owns. Essentially, a judgment lien secures payment of your judgment when the person’s real estate is sold, refinanced, or transferred. While there is no law that requires the judgment lien to be paid before sale or transfer of the property can occur, as a practical matter, the lien must be dealt with in some manner. Either the lien must be released as a condition of the transaction, or the new owner of the property will become responsible for the lien.
How a Judgment Lien Works
A judgment lien is a passive and relatively inexpensive way of collecting on your judgment lien. Until the owner takes some action to sell, transfer, or refinance the real estate, the lien will remain attached to the real estate. Once the owner of the real estate takes action to sell, transfer, or refinance the real estate, all judgment lien holders may be entitled to collect on their judgments, depending on the nature of the situation. Thus, the judgment lien will simply remain on the real estate until paid in full, which can be for a very long period of time if the owner never sells or refinances the real estate.
How Judgment Liens Are Filed
Every state has different procedures for filing judgment liens. In some states, any court judgment automatically becomes a judgment of record that attaches to real estate owned by the person who owes the debt, or the judgment debtor. In other states, persons or entities holding a court judgment must take certain steps in order to ensure that the judgment lien attaches to the judgment debtor’s real estate. Usually, most state laws require you to register your judgment with the real estate or land records of the jurisdiction in which the real estate is located. This enables title searchers to discover the lien on the real estate in the event that the real estate owner wishes to refinance, transfer, or sell the real estate.
Release a Judgment Lien
The easiest way to get a judgment lien released is to pay the judgment in full. In this case, the law requires that the creditor, or the person or entity to whom the judgment in owed, release the judgment from the debtor’s real estate when it is paid in full. Again, procedures vary from state to state as to how a judgment lien may be released. In most cases, the creditor signs a verified statement that the judgment has been paid in full and should be released.
For more information about judgment liens, you should consult an attorney experienced in real estate liens and law. An attorney will be able to give you the best advice regarding the filing and releasing of judgment liens in your jurisdiction.