Does a Creditor Lose Priority Upon the Filing of a Renewal for Summary Judgment?

To expedite the process of collecting a debt, a creditor can file a motion for a "summary judgment." Summary judgments do not require both parties to present their cases during a hearing. The Federal Rules of Civil Procedure note that a creditor is entitled to a summary judgment if he can provide the court with documentation backing his case. Regardless of the type of judgment, state laws determine the creditor's freedoms or limitations in enforcing that judgment.

Judgment Liens

After receiving a summary judgment, the creditor -- now a "judgment creditor" -- can attach a lien to the debtor's real estate. The exact process for recording a lien varies by state but, in general, the debtor can neither sell nor transfer ownership of the property without paying the creditor. The lien, however, is only enforceable for the time the judgment is valid or until the debtor pays his debt.

Lien Priority

Companies can attach liens to real estate for a variety of reasons, but all lien holders have one thing in common: They can foreclose on the home at any time. Should a foreclosure take place, the foreclosing lien holder must follow the state's laws regarding lien priority.

While all states differ, lien priority is typically determined by the date each lien holder recorded its lien. Lien holders who recorded their liens after the foreclosing creditor's lien have their claims wiped away in the foreclosure. The foreclosing creditor, however, must pay off any liens that were already present against the property when it filed its own lien. Previously filed liens are referred to as "superior" liens while later liens are "junior" liens.

Judgment Renewal

If the judgment creditor's attempts to recover the debt are unsuccessful, it can renew its judgment and continue pursuing payment rather than allowing the judgment to lapse and losing its ability to collect via force, such as through a real estate lien.

In some states, such as Florida, renewing a judgment automatically renews any liens the judgment created. Should this occur, the creditor's lien priority order remains unaffected. If the creditor allows the judgment to lapse in its entirety, however, it can still renew the judgment but must re-file the lien -- stripping it of its priority. Still other states, such as Montana, require creditors to file a new lawsuit rather than renewing their old judgment. The new lawsuit would result in a new judgment and, subsequently, a new lien at the bottom of the property's priority order.

Alternate Options

While losing a lien's priority order puts the judgment creditor at a disadvantage, it does not prevent the creditor from collecting the debt. A summary judgment provides a creditor with more options than just real estate liens. Judgment creditors can levy bank accounts, garnish wages and, depending on the debtor's state's laws, seize some forms of personal property from the debtor, such as jewelry or furniture, to satisfy the judgment.