Property Liens

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Another way to collect money from a person or business against whom you have a small claims judgment is by putting a lien on real estate owned by the debtor. In some states, the entry of a court judgment automatically creates a lien on any real property the debtor owns in the county where the judgment was obtained. In the rest of the states, you must record the judgment with the county to create a lien on the debtor's real property.

Once you have a lien on the judgment debtor's property, especially real property, there is a good chance you'll eventually be paid. It usually works like this: When the judgment debtor wishes to sell the real estate, the title will be clouded by your lien and the debtor will probably pay you off to be able to transfer clear title to a third party. Likewise, if the debtor wishes to refinance, it almost certainly will be contingent on all liens being paid off. Thus, sooner or later, you should get your money. Remember, however, that a portion of the debtor's equity in the home is exempt from collection.

Before you record your lien, make sure you wait until the time to appeal has passed. In many states, here's how to record a property lien against all the debtor's real estate that you know about:

  • 1. Get an Abstract of Judgment form from the small claims clerk's office at the court where your case was heard (a small fee is required).
  • 2. Take or mail the Abstract of Judgment form to the County Recorder's office in each county where property is located or you think the debtor might buy property, and pay the required fee. The recorder's office will record your lien and notify the judgment debtor.

by: Ralph Warner

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