Judgment Liens on Property in Indiana

You went to court and got a judgment that says you're entitled to money from the party you sued, now called a "judgment debtor." What comes next? How can you—the judgment creditor—collect the money you're due? That's the focus of this article.

One way to collect is by putting judgment liens on the judgment debtor's Indiana property. After a quick review of how judgment liens differ from judgments, we'll turn our attention to the specifics of Indiana law. In particular, we cover:

• the kinds of property subject to Indiana judgment liens
• how you put judgment liens on Indiana property
• how long your judgment lien lasts, and
• the ways you can turn your judgment lien into money.

If you want some background information, here's more about how court judgments are collected.

What's the Difference Between a Judgment and a Judgment Lien?

A judgment is a court order that says a judgment creditor is legally entitled to a sum of money from a judgment debtor. But a judgment, standing alone, isn't self-enforcing. That is, you can't take a judgment to your county sheriff's office and demand that the judgment debtor's real estate be sold to pay you.

If you want to seize and sell the judgment debtor's property, you first have to attach your judgment to specific items of property. That's what a judgment lien does. As we'll see below, when the court clerk records your judgment in the county judgment docket, it becomes a lien against the judgment debtor's nonexempt property in that county. At that point, you can look for ways to turn your judgment into cold, hard cash.

Kinds of Property Subject to Indiana Judgment Liens

In Indiana, you can attach judgment liens to:

• real estate, such as land, buildings, and other improvements, and
• personal property like cars, artwork, antiques, electronics, and household furnishings.

A properly recorded judgment attaches a lien to the judgment debtor's nonexempt real estate—both presently owned and later acquired—in that county. Judgment liens on personal property get attached in a different way. We discuss the processes for attaching judgment liens below.

Property Exempt From Indiana Judgment Liens

Like all states, Indiana exempts some property—both real and personal—from the reach of creditors. Exempt amounts mentioned here represent the value of the debtor's equity in the property, which might not be the same as the property's market value.

Here are a few examples:

• a homestead, consisting of real or personal property used as a residence, valued at up to $15,000
• health aids prescribed by a health care provider
• other real estate or personal property worth up to $8,000
• tax exempt pension or retirement plans, health savings accounts, and educational savings plans, and
• intangible personal property such as cash and bank accounts, with a value of up to $300.

How to Attach Indiana Judgment Liens

Attaching a judgment lien to Indiana real estate isn't complicated. But if you want a lien on the debtor's personal property, there's more work involved.

Judgment Liens on Real Estate

An Indiana circuit court judgment automatically becomes a judgment lien on the debtor's nonexempt real estate in the county where the judgment was entered. For judgments entered by other courts in the county, check with the clerk of the court that entered the judgment to see if additional steps are necessary.

To get a judgment lien on nonexempt real estate in a different county, file a certified copy of the judgment with the circuit court clerk's office there. You can get certified copies of your judgment from the clerk of the court where the judgment was entered. You'll need an original certified copy for each county where you want a judgment lien.

You want a judgment lien in each county where the judgment debtor owns, or might in the future own, real estate.

Judgment Liens on Personal Property

Judgment liens don't automatically attach to personal property. If you want a lien on the judgment debtor's personal property, you must "execute" on (try to collect) your judgment by having the sheriff levy (seize) specific items of property.

To do this, you file a request with the clerk of the court, asking for a writ of execution. This writ is an order directing the sheriff to locate and seize the judgment debtor's nonexempt property. Once property has been seized, it can be sold at auction and the proceeds distributed to creditors.

If you're considering this step, speak to an Indiana collection lawyer first. They can tell you whether it's worth your time and expense to go after the judgment debtor's personal property—and there's a good chance it won't be. If it's likely to be worthwhile, they'll guide you through the process.

When Does an Indiana Judgment Lien Expire?

In Indiana, a judgment lien expires ten years from the date the judgment was entered. What happens if you haven't collected your judgment before your lien expires? The short answer is: You can still try to collect your judgment, you just won't have the benefit of a judgment lien while doing so. See our discussion in the next section.

How Long Does an Indiana Judgment Last?

The answer to that question is more complicated than you might imagine. For starters, understand that a judgment is only good if you can execute on it. When it comes to collecting your Indiana judgment, there are a couple of dates you must keep in mind.

10 Years From Date of Entry or Last Execution

You can try to collect on your judgment at any time within 10 years from the later of the date:

• it was entered by the court, or
• you last took steps to execute on it, as long as the judgment isn't 20 years old.

After 10 years from the last of these dates, you're only allowed to undertake collection activity with permission from the court. You must ask the court's permission in a written motion, and you have to give the judgment debtor notice of your request.

20 Years From Date of Entry

An Indiana judgment is presumed to be satisfied after 20 years from the date it was entered. But this rule only creates a presumption, meaning you're allowed to go to court after 20 years and "rebut" (defeat) it by proving that the judgment isn't satisfied.

If you find yourself in this situation, you should get advice from an Indiana collection lawyer.

How Do You Turn an Indiana Judgment Lien Into Money?

In general, there are three ways you can try to collect on an Indiana judgment lien:

• negotiate a settlement
• wait for the judgment debtor to sell or refinance the property, and
• execute on your lien.

Negotiate a Settlement

If you want payment sooner rather than later, this is likely your best choice. No, you won't get all the money you're entitled to, but that's the nature of a settlement. You'll collect faster—and more inexpensively—than via the other two options.

Wait for the Judgment Debtor to Sell or Refinance

Most often, a buyer or lender will insist on clear title, free of all judgment liens. So, to sell or refinance, the judgment debtor will have to approach you to make a deal. Only now, you've got more negotiating leverage. As long as you're willing to sit tight and wait, this too is a low-cost, low-stress way to collect.

Execute on Your Lien

Executing on your lien means having the sheriff sell the judgment debtor's property at auction. This might seem like a tempting option. But before you head down this path, check with a local attorney to find out about the legwork and costs involved. In addition, see who's ahead of you in payment priority, or you might discover—too late—that the sale proceeds aren't enough to pay you in full (or at all).

Lastly, be aware that this step might be just the push the judgment debtor needs to declare bankruptcy. Should that happen, you're likely to be standing in a long, very unhappy line of creditors with little chance of getting paid.

Next Steps

We've covered the judgment lien basics, but of course, the devil's in the details. Now that you're familiar with Indiana law, you might decide that your best option is to get help collecting your judgment. An experienced Indiana creditor's rights or collection attorney can answer your questions and help you chart a collection path that gives you the best chance to maximize your recovery.