Under Maryland law, a creditor may file a lien on a debtor's house, but only after he has obtained a valid judgment issued by a court. A judgment lien has the same force and effect --- though not necessarily the same priority --- as other encumbrances on the debtor's property, and it must be paid in full before the property can be transferred or sold.
Obtaining A Judgment
A creditor must first file suit against the debtor for the balance owed. For consumer debt, the provisions of the Fair Debt Collection Practices Act require that the suit be filed in the judicial district in which the debtor resides. If the creditor has sufficient documentation to evidence the debt and any remaining balance due, unless a debtor has a legitimate defense to repayment, the creditor will ultimately obtain a judgment from the court for the amount owed after he files suit. Once he obtains judgment, a creditor can initiate court-approved collection procedures which, under Maryland law, include garnishment and placing a lien against the debtor's real property.
Recording The Lien
The judgment creditor must record the lien in the county in which the property is situated. Once properly recorded, the lien attaches to the property and becomes an encumbrance on the debtor's real estate. The lien must be recorded in the same name as that which appears on the deed. A judgment entered against a husband only does not constitute a lien against the real property owned by the husband and wife jointly.
Cloud On Title
Even if other secured lien holders, like the bank that holds the mortgage on the property, have priority over a judgment lien at the time it is recorded, the judgment lien still acts as a cloud on the title. If the debtor ever sells the property at a later date, a creditor who holds a judgment lien will be paid the full amount of the judgment.
Considerations
As a practical matter, in most circumstances, a creditor who obtains a valid judgment lien against the debtor's real estate will not be able to force a judicial sale of the property once his lien is recorded. In most cases, the mortgage holder will have a priority lien on the sales proceeds; and depending on the prevailing real estate market conditions, the debtor may have insufficient equity to pay off the judgment lien holder.
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