Real Estate Liens on Jointly Owned Property
Find out if a creditor with a judgment against your spouse can place a lien on property you both own jointly.
If a creditor gets a judgment against your spouse (and not you), can it record a lien against real estate that you own jointly with your spouse? State laws vary widely on the extent of a creditor's ability to place liens on real property jointly owned by spouses. Your rights will depend on the laws of your state, and how your state divides marital property and debts between you and your spouse. There are essentially three types of property ownership and debt-sharing schemes:
- community property
- tenancy by the entireties, and
- common law.
Depending on your state and how you own the property, there are several possibilities if a creditor gets a judgment against your spouse only:
- The lien could attach to the entire property even if you did not owe that debt.
- The lien could attach to only your spouse's interest in the property
- The lien may not attach to the real property at all.
Community Property States
If you live in a community property state, you and your spouse legally share almost all property and debts. This means that all property you acquire during the marriage (except property you received by gift or inheritance) belongs to both of you, whether or not the property is titled jointly or separately. This also means that you and your spouse share liability on debts, whether or not you signed for that debt or were included as a judgment debtor. Consequently, a judgment creditor of your spouse may be able to file a lien against real property that you jointly own with your spouse. That lien could attach to the entire property. If you own real estate that is titled solely in your name, your spouse's judgment creditor may still be able to file a lien on that property.
Currently, community property states and jurisdictions include: Alaska (if the spouses signed an agreement to share assets as community property), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Puerto Rico, Texas, Washington, and Wisconsin.
Exceptions to the Community Property Rule
Not all community property states will let a creditor file a lien on joint property where only one spouse is a judgment debtor. That will depend on whether your state's community property laws have carved out an exception to making you liable for your spouse's debts.
Some community property states provide for sharing of property, but not for sharing of debts. For instance, Texas is a community property state, but Texas judgment liens do not attach to a non-debtor spouse's separate property. The only way around this is for the creditor to take a judgment against you, too.
For more information on your rights as a spouse in community property states, see Separate and Community Property During Marriage: Who Owns What?
Tenancy by the Entireties States
In states that recognize property ownership in the form of tenancy by the entireties, a judgment lien normally does not attach to jointly-owned real property at all. The only exception to this is if the creditor also took a judgment against both of you.
What is a tenancy by the entirety? With tenancy by the entirety, you and your spouse have full rights to each other's property. This special type of property ownership is usually only available to legally married couples. So, if you own real estate jointly with another person who is not your legal spouse, a judgment lien against the other owner may still attach to that property.
Many states allow ownership by tenancy by the entireties, although there may be some limitations on this right. You should research the laws of your state to determine if this right is available to you.
Common Law/Separate Property States
In common law property states (for the most part, those states that are not community property states), the debt of each spouse remains his or her separate liability unless:
- both spouses benefited from the debt, or
- both spouses jointly took out that debt.
Spouses that separate their finances are usually not responsible for the debt of the other. If the spouses jointly share debts and property, then a creditor may reach that property.
If you own real estate jointly with a spouse in a common law property state (and you don't own the property as tenants by the entirety), then a creditor may be able to put a lien on that property, whether or not you were ever individually liable on that debt. However, the lien only attaches to up to one-half of the value of the real property. This represents your spouse's common law interest in the jointly owned property.
In some states, if you were not individually liable on the debt, the creditor cannot garnish the joint account unless the debt was incurred for the benefit of you and the family, or to acquire joint property.
For more information on your exposure to debt liability in a common law state, see Spouse Debts in Common Law States.
Protecting Your Property With a Homestead Exemption
Notwithstanding whether you live in a community property or common law state, creditors may be unable to execute on the lien because of a homestead exemption. Homestead exemptions are special rights given to homeowners that protect some or all of the value of the property against liens.
(To learn more about how the homestead exemption works and to find out how much the exemption is in your state, see The Homestead Exemption in Bankruptcy. The homestead exemption protects your property from creditors in much the same way it protects your property in Chapter 7 bankruptcy.)
To learn more on judgment liens, including the laws in your state, see our article on judgment liens in each of the 50 states. For information on how creditors enforce judgment liens, and how you can object to a creditor's attempt to execute on a judgment lien, see How Creditors Enforce Judgments.