A judgment lien is a type of nonconsensual lien (a lien that attaches to your property without your agreement). It is created when someone wins a lawsuit against you and then records the judgment against your property.
How Is a Judgment Lien Created?
A judgment lien can be imposed on your property only after somebody sues you and wins a money judgment against you. In most states, the judgment creditor (the person or company who won) must then record the judgment by filing it with the county or state. In a few states, a judgment entered against you by a court automatically creates a lien on the real estate you own in that county—that is, the judgment creditor doesn’t have to record the judgment to get the lien.
Types of Property Judgment Liens Can Attach To
Judgment liens on real estate. A judgment lien affects real estate you own in the county where the lien is recorded or the judgment is entered.
Judgment liens on personal property. In many states, a judgment lien also applies to your personal property (property other than real estate) for a period of time after the judgment, if certain judgment collection techniques are employed. However, judgment liens on personal property are generally ineffective, because most personal property has no title, and the liens are not recorded. This means that the personal property could easily be sold to a third party who has no idea that the lien existed.
Judgment liens on vehicles. A judgment creditor can also file a judgment with your state motor vehicles department to get a judgment lien on any car, truck, motorcycle, or other motor vehicle you own. You may not know about this type of lien unless you check with the motor vehicles department or the creditor files a proof of claim in your bankruptcy case, describing its interest as “secured.”
Judgment Liens Can Attach to Later Acquired Property
Typically, judgment liens that have been recorded in your county will attach to property that you acquire later. For example, a judgment may be recorded in your county land records office even if you don’t own any real estate. If you buy some real estate a few years later, you’ll discover that it is now burdened by that pesky old lien that was just sitting there, waiting for you to make a move. Most real estate liens expire after a certain number of years (seven to ten in most states), though they can typically be renewed.
Avoiding Judgment Liens in Bankruptcy
You can get rid of some judgment liens in Chapter 7 bankruptcy. To learn more, see Getting Rid of Judgment Liens in Bankruptcy.)