What Are Judgment Liens?

A judgment lien is granted by a judge against a debtor for an unpaid debt. When the creditor wins the judgment, he can pursue various remedies to collect on the debt from the debtor. First, the creditor has the option to notify the debtor of the judgment lien. If the debtor is unresponsive, the creditor can attempt to collect on the debt in other ways. The creditor can have the lien placed against real property owned by the debtor. The creditor can force the garnishment of the debtor's income.

Drawbacks to Collections

Although, a creditor can be awarded a judgment, he may not actually be able to collect the money owed by the debtor. The creditor has the option to force a sheriff's sale of the debtor's property to collect on the debt. However, the creditor must first locate the county in which the debtor owns real property. Additionally, the creditor's judgment may be in a subordinate position to other existing loans on the debtor's real property --- this means that the other creditors must be paid off first --- making it much more difficult to collect. Another hurdle to collection on a judgment is that the debtor may file for bankruptcy and be legally exempt from paying the judgment.

Judgment Lien on Real Property

A creditor can obtain an abstract of judgment which lists specifics of the judgment, such as the amount the debtor owes the creditor, the interest rate on the judgment amount, court costs and the ruling of the court. The purpose of the abstract of judgment is to create a public record and create a lien or attach the lien to real estate owned or later acquired by the defendant located in the same county where the abstract of judgment is recorded. The lien stays in place until the debtor voluntarily pays it off or until the property is sold. Typically, the proceeds from the sale of the home are used to pay off the lien.

Judgment Lien on Other Property

Judgment liens can be filed against items such as bank accounts, boats, motor vehicles, equipment or jewelry. A creditor may file a notice of judgment lien against the debtor to collect money owed. The notice of judgment --- filed with the Secretary of State where the debtor lives --- lists details of the creditor, the debtor, dates regarding the judgment, the judgment amount and the court which issued the judgment. As with liens on real property, judgment liens are typically satisfied from the sale of personal property.

Satisfying the Judgment Lien

The process of satisfying a judgment lien varies somewhat from state to state. Although a garnishment will eventually pay off the amount of a judgment, the fastest way to satisfy it is to voluntarily pay it off in full. When the debtor pays the creditor off, the creditor is required to release the judgment. Typically the creditor will sign a verified statement declaring the judgment has been satisfied.