A lien ensures a legal right to claim a security interest granted over real or personal property provided by the owner of the property to the creditor for the satisfaction of some debt or performance of other obligations. Generally, liens are of three types: consensual, statutory and judgment.
A Judgment lien is a type of lien that arises as a result of a lawsuit. It is a court ruling that gives a creditor the right to access assets such as the debtor personal property, business and real estate to satisfy some sort of legal obligation such as loan repayment.
In real estate, when a lawsuit appears as a result of non-paid debt, a judgement lien may arise. Real estate property is placed on hold by a judgment lien to collect on a debt. Under the judgment lien, by winning a lawsuit against a debtor a creditor obtains the right of his (debtor) real or personal property.
Some important features of the judgement lien are as follows:
A lien is called a judgement lien only when it is derived from a court-issued money judgement.
Of the three main types of lien, the judgment lien is the strictest one as it is created by a court grant where the court judgment itself is the basis for the lien.
The circumstances that can produce a judgement lien can vary. It can be said that any incident that involves a lawsuit can end up being the reason for a judgement lien.
While property liens are permitted by the debtor, judgement liens are nonconsensual in nature. They are awarded by the courts without the consent of the debtor.
When a judgement lien is filed appropriately, it becomes attached to any personal or real property registered in the name of the debtor only
The judgement lien can not be attached to the debtor spouse property. Rather it will be attached to any future acquisitions if the debtor does not own any property at the time the lien is filed.
The court never collects the funds on the creditor behalf when a judgement is issued. The lien is the first step by the creditor in a process that will allow him a sale of the attached property.
Fortunately, a judgement lien can be removed in several different circumstances like petitioning the court for removal or paying off all the debt.
