Judgment Liens on Property in Nebraska

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 Nebraska property. After a quick review of how judgment liens differ from judgments, we'll turn our attention to the specifics of Nebraska law. In particular, we cover:

• the kinds of property subject to Nebraska judgment liens
• how you put judgment liens on Nebraska 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 discuss later, upon entry, a Nebraska judgment becomes a lien on the judgment debtor's property in the county where judgment was entered. At that point, you can look for ways to turn your judgment into cold, hard cash.

Kinds of Property Subject to Nebraska Judgment Liens

In Nebraska, you can attach judgment liens only to real estate, meaning land, houses, buildings, and other improvements. A properly recorded judgment attaches a lien to real estate the judgment debtor:

• presently owns, and
• acquires later, as long as your judgment lien is still good.

No Liens on Personal Property

You can't put judgment liens on Nebraska personal property—cars, artwork, antiques, electronics, household furnishings, and the like. But that doesn't mean a judgment debtor always gets to keep their autos, boats, and other big ticket items. Even without judgment liens, there's a way to have the sheriff seize personal property.

If you're considering this step, speak to a Nebraska 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.

Property Exempt From Nebraska Judgment Liens

Like all states, Nebraska exempts some property—both real and personal—from the reach of creditors. Unless otherwise indicated, dollar amounts mentioned here represent the maximum value of the debtor's exempt equity in the property, which might not be the same as the property's market value.

Here are a few examples.

• Homestead exemption. Nebraska's homestead exemption protects equity of up to $120,000 in the judgment debtor's dwelling house and the land (160 rural acres or two lots in a city or village) on which it's situated.
• Motor vehicle exemption. Nebraska law protects $5,000 of equity in one motor vehicle.
• Household goods exemption. A Nebraska judgment debtor can keep furnishings, household goods, computers, appliances, books, or musical instruments used primarily for personal, family, or household purposes, and having an aggregate fair market value of as much as $3,000.
• Wild card exemption. In addition to other exemptions, Nebraska lets judgment debtors keep up to $5,000 in personal property (except wages) of their choosing.
• Tools of the trade exemption. This exemption shields as much as $5,000 in tools, equipment, professional books, or supplies used in the judgment debtor's business or occupation.

How to Attach Nebraska Judgment Liens

A Nebraska district court judgment automatically attaches a lien to the judgment debtor's real estate in the county where judgment was entered, as soon as the clerk of the court enters it on the county judgment index. No further action is necessary.

To attach a lien to real estate in a different Nebraska county, follow these steps.

• Get a judgment transcript. First, you need to get a transcript (summary) of your judgment from the clerk of the court that entered it. Check the clerk's website to see if you can order online or by mail, and for ordering instructions. If you don't find what you need there, call the clerk's office. You need one transcript for each county where you want a judgment lien.
• File the transcript. File a transcript of the judgment with the district court clerk in each county where you want to attach a judgment lien Once the court clerk enters the transcript on the county judgment index, you have a lien in that county.

A Nebraska judgment lien expires five years from the later of the date:

• judgment was entered, or
• you last executed and levied on the judgment.

Executing and levying means taking steps to collect your judgment by trying to locate and seize the judgment debtor's property. To do this correctly, you'll want help from experienced Nebraska legal counsel.

How Long Does a Nebraska Judgment Last?

A Nebraska judgment becomes dormant five years after the later of:

• the date it was entered, or
• the date the judgment creditor last executed on it.

A dormant judgment isn't dead, but it's not quite alive, either. Think of it as a "zombie" judgment. A dormant judgment can't support a judgment lien. And you can't take any steps to collect on a dormant judgment until you revive it.

You can revive a dormant Nebraska judgment, but you must do so within 10 years from the date it goes dormant. If 10 years pass and you haven't revived it, your judgment is dead. Nothing you do will bring it back to life. You've lost the legal right to collect the money you were owed.

Reviving a Dormant Judgment

You revive a dormant judgment by filing a motion to revive with the court that originally issued it. When you file the motion, the court will enter a conditional order of revival. You must serve the motion and conditional order on the judgment debtor, just as you would serve a lawsuit.

If the judgment debtor doesn't object, the court makes the conditional order final and your judgment is revived. If the judgment debtor objects, the court must hold a hearing. It's the judgment debtor's burden to show that the judgment shouldn't be revived. The only defenses to revival are:

• there's no judgment that can be revived
• the original judgment was void, or
• the judgment has been fully paid.

Get New Judgment Liens

Remember, when a judgment goes dormant, any judgment liens based on it disappear. Reviving a dormant judgment doesn't automatically bring those liens back to life. If you want new judgment liens—and you probably do, if you haven't collected what you're owed—you must follow procedures like those described above to get them.

A Nebraska collection lawyer can provide more specifics.

How Do You Turn a Nebraska Judgment Lien Into Money?

In general, there are three ways you can try to collect on a Nebraska 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. 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 Nebraska judgment lien basics, but of course, the devil's in the details. Now that you're familiar with Nebraska law, you might decide that your best option is to get help collecting your judgment. An experienced Nebraska 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.