Property at Risk: When a Civil Judgment Leads to a Judgment Lien

Law clerks looking through civil judgment records in search of judgment liens will probably not find what they are looking for. Although the two are related, they are generally filed separately. The thing about a judgment lien is that it can put a person’s property at risk. At the very least, it affects how easily a person can sell a piece of property.

One Leads to Another

A judgment leaning being placed on a person’s property is the result of a successful judgment being entered against them. In other words, one leads to another. For better understanding, let us start with the civil judgment itself.

Two parties engaged in a civil lawsuit will not get a verdict from the court. Rather, civil courts render decisions known as judgments. In some cases, judgments are rendered in favor of one party and against the other. But there are cases when both parties are liable to some extent. The court’s judgment will reflect that.

Judgments can be either monetary or non-monetary in nature. Here are two examples to illustrate the point:

  • Personal Injury Lawsuit – In a personal injury lawsuit, the plaintiff is seeking a monetary award from the defendant. That award might cover medical bills, lost income, and pain and suffering.
  • Labor Lawsuit – A lawsuit brought by the government against a company for labor law violations seeks to force the company to rectify its labor practices. Although a civil penalty might be imposed, the point of the suit is not to gain a monetary award.

In both cases, the decision rendered by the court is known as a judgment. Enforcing that judgment is left to the parties involved in the suit. Courts generally do not get involved in enforcement except under very limited circumstances.

Obtaining a Judgment Lien

So, where does the judgment lien come in? After a monetary judgment is entered against a defendant, the plaintiff has the legal authority to collect the award. Sometimes defendants, also known as judgment debtors, willingly comply and pay up. Other times they do not. There are times when judgment creditors need to call in a judgment collection agency like Judgment Collectors.

A collection agency will use every tool at its disposal to encourage the debtor to pay. One of those tools is the judgment lien. The collection agency will file a judgment lien against a piece of property owned by the debtor, on behalf of the creditor. The lien will remain in place until the debt is satisfied.

Placing a judgment lien on a piece of property prevents the owner of that property from selling or otherwise transferring ownership of it without paying off their debt. The problem with judgment liens, at least from the creditor’s perspective, is lien position.

More About Lien Position

It turns out that a piece of property can have more than one lien against it. When this is the case, each lien holder occupies a position. The one who filed first is in first position, followed by the second filer, and so forth. Why does this matter? Because position determines the order of payment. Filing a judgment lien and ending up in the second or third position could mean not getting the full amount owed should the property be sold.

Property liens are just one option for collecting an unpaid judgment. There are others, including garnishment and property seizure. The takeaway here is that civil judgments and judgment liens are not the same thing. They are related, but it is the civil judgment that could lead to a judgment lien being filed.