Automotive Related Legal Forms

No Downloads found

What Is A Judgment Lien?

Posted by on Jan 22, 2015 in Legal Help 2 | 1 comment

A judgement lien is a court ordered lien that is placed against the home or property when the homeowner simply fails to pay a debt. This doesn’t seem like a big deal, but when the homeowner has a judgement lien against his or her home and wants to sell it, the judgement lien has to be paid in full before the home or property can be sold. judgement liens can be placed against the property for a variety of reasons such as unpaid credit card bills, utility bills, department store bills, landscaping or home improvement bills, and just about any bill that the homeowner has failed to pay in a reasonable amount of time. Any bill that can cause one to end up in court can result in a judgement lien. A judgement lien is different than a trust, in that the judgement lien holder cannot foreclose on the home or the property as trust holder can. judgement lien holders can demand payment, but ultimately they must wait for the homeowner to sell the property before they can expect to be paid the money that they are owed according to the judgement. Luckily for the judgement lien holder, the court will typically assign an interest rate to these liens so that the lien holder is compensated for their waiting as the interest will continue to accrue until the debt is paid in full. Because the majority of people will live in their home for quite some time, the interest can make a judgement lien grow, and grow, and grow over the years so that it is quite large. Imagine what a lien of just $3,000 would grow to over the years if the interest rate were 15% annually and that would be an even bigger amount if the debt were $5,000 or $10,000! Of course, judgement liens require court action. A creditor will take the homeowner to court where the judge will determine if the homeowner does in fact owe the creditor any money. If the court decides that the creditor is owed the money, and the homeowner will not or cannot make payment, the judge will order that a judgement lien be placed against the property. The judgement lien will then be entered into land records offices for the city or county so that the home cannot be sold without repayment of the debt. Once the lien is filed with the land records office, the judgement lien is said to be attached to the property, meaning that it cannot legally be sold without paying off that lien. If the judgement lien is not listed at the land records office, then it means that the debt or lien is not legally attached to the property and does not need to be paid off to sell the home. A home or property can have numerous liens against it, which may present a problem when the home is to be sold. Fortunately, the law says that liens will be paid off in the order that they were attached to the property, meaning the first lien will be paid first, the second will be paid second, and so on. This is a law that was basically developed for when a home is foreclosed on. If a foreclosed home is auctioned it will...

read more