Can a Creditor Take My House for a Judgment?

If you lost a lawsuit and owe money, you might be wondering: Can a creditor actually take your house? In many cases, a judgment lien may attach to your property, giving a creditor the legal right to collect what you owe.

While a judgment creditor can sometimes foreclose on a home to recover a debt, whether the creditor will actually foreclose depends on factors like your state's homestead exemption laws, how much equity you have in your home, and whether other liens such as mortgages have priority (come first).

What Is a Judgment Creditor?

If a creditor sues you in court for a sum of money and you lose the case, the creditor will get a money judgment. The creditor then becomes what's known as a "judgment creditor."

That creditor may then obtain a judgment lien, which is a lien that attaches to your real estate, usually by filing a copy of the judgment in the county records. However, sometimes a lien is created automatically when the court enters the judgment. This process converts the judgment from an unsecured debt to a secured debt.

And, in some cases, the judgment creditor can force the sale of your property to get paid.

Can a Judgment Lien Lead to Foreclosure?

Generally, a judgment creditor with a lien gets paid when the debtor sells or refinances the home. The lien must be paid out of the sale proceeds or refinance money. However, if the creditor chooses not to wait for a sale or refinance, the creditor can execute on the lien (foreclose) by asking a court for permission to sell the debtor's real estate.

When Creditors May Force the Sale of Your Home

If you have enough equity in your home (enough so that the judgment lien and any superior lienholders will get paid), a judgment creditor might foreclose to collect on the judgment. But the creditor can't foreclose if the property's equity is exempt due to a homestead exemption.

A key protection for homeowners is the homestead exemption. This exemption protects a certain amount of equity in a primary residence from being seized or sold to satisfy creditors. The exemption amount varies from state to state. If the homestead exemption covers all or most of the equity, the judgment creditor generally can't force a foreclosure to collect on the judgment because the exempt equity is protected.

What Is a Homestead Exemption?

Each state allows specific types of property to be exempt from creditors, including judgment creditors. Again, a "homestead exemption" protects a certain dollar amount of the equity in a debtor's homestead (their primary residence) from judgment creditors.

California Homestead Exemption Explained

In California, the amount of the homestead exemption is based on the countywide median sale price for a single-family home in the calendar year prior to the calendar year in which the judgment debtor claims the exemption, not to exceed a certain amount. So, as of 2025, the automatic exemption ranges from approximately $361,000 to $722,000, depending on your county's median home price. The amounts are adjusted annually for inflation based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations. (Cal. Civ. Proc. Code. § 704.730 (2025).)

Usually, it's not worth the judgment creditor's time and effort to force a sale of your home. That's because the creditor would have to pay off any previously recorded liens, like mortgages, that are on the property. Plus, the judgment creditor must take into account that the homeowner could be entitled to a homestead exemption.

So, for a forced sale to make sense, you'd have to have enough equity in the property to cover any mortgages, any homestead exemption, other prior liens, foreclosure costs, as well as enough left over to pay off the judgment.

Frequently Asked Questions (FAQs) About Judgment Creditors and Foreclosure

Here are some FAQs about whether a judgment creditor can force the sale of your home.

Can a judgment creditor take my primary residence?

Yes, a judgment creditor can get a lien on your primary residence and force a sale (foreclose). But judgment creditors rarely foreclose because they'd have to cover any prior liens, like a mortgage, and the property might be protected by a homestead exemption. Foreclosing is usually expensive and a lengthy process. So, most judgment creditors don't foreclose. They simply wait for you to refinance or sell your home and get paid out of those funds.

Do homestead exemptions apply to rental or investment properties?

Generally, no. The purpose of a homestead exemption is to protect a debtor's primary residence. Rental and investment properties are usually excluded from homestead exemption protections, so these properties typically remain fully subject to creditor claims.

Can filing for bankruptcy stop a judgment foreclosure?

Yes, filing for bankruptcy (Chapter 7 or Chapter 13) can temporarily halt foreclosure or forced sale proceedings related to judgment liens because of the automatic stay. Bankruptcy might also allow you to reorganize or discharge debts. However, the outcome depends on your specific case, type of the bankruptcy filed, and state exemption laws, so consider consulting with a bankruptcy attorney to learn more.