Table of Contents
< All Topics

Is a Judgment same as an Involuntary Lien?

Is a Judgment same as an Involuntary Lien?

What Is a Judgment Lien?

A judgment lien is a court ruling that gives a creditor the right to take possession of a  debtor’s property if the debtor fails to fulfill their contractual obligations. This lien may be made against an individual, personal property, and real estate or business and allows the creditor to access assets to satisfy the judgment.

  • A judgment lien is a court ruling that gives a creditor the right to take possession of a debtor’s property if the debtor fails to fulfill their contractual obligations.
  • Judgment liens are nonconsensual because they are attached to property without the owner’s consent or agreement.
  • These liens can be attached to real or personal property, business, even future acquisitions.


How do Judgment Liens Work?

If someone owes money to a creditor and doesn’t pay, the creditor may sue the individual for the balance. If the court rules against that individual, the creditor can file a judgment lien against the individual. A judgment lien is considered a nonconsensual lien because it is attached to a piece of property without the owner’s consent or agreement.

Once a judgment lien is filed with the appropriate authority, it becomes attached to the debtor’s personal or real property. Personal property refers to assets such as cars, appliances, or furniture. Real property, on the other hand, refers to things like homes and other buildings, or land.

The property must be registered in the debtor’s name, so if they have a debt that goes unpaid, the judgment lien cannot be attached to their spouse’s property. If they do not own any property at the time the lien is filed, it can be attached to any future acquisitions—provided the lien doesn’t expire in the meantime. One drawback of liens on personal property is that a large portion of someone’s personal property has no title. Therefore, liens are not officially recorded against that property, and it could be sold off to a third party who is unaware of the lien’s existence.

Depending on the state, the rules can be a little different.  In most states, the judgment creditor must record the lien via a county or state filing. In some states, if a court enters a judgment against a debtor, a lien is automatically created on any real estate the debtor owns in that county.


Distinction between Judgments and Judgment Liens.

These are two different things, and understanding the difference is crucial when conducting a thorough Title research.

In simple terms, a judgment represents the official ruling made by the court concerning a civil matter. On the other hand, a judgment lien, often known as an “abstract of judgment,” is an involuntary lien established to provide constructive notice and attach to the property and/or assets of the Judgment Debtor.

When referring to a judgment, it becomes the responsibility of the winning party to enforce collection upon the judgment.  Depending on the state, a judgment may be automatically filed with the county or state filing.

Should the  debtor fail to satisfy the judgment voluntarily, a judgment lien serves as a means to ensure enforcement of the court’s decision. The judgment creditor files the lien against the judgment debtor to secure their position in executing the collection of the debt owed as per the civil judgment. Generally, the lien is settled using proceeds from the sale when the debtor sells the property or during a refinancing transaction.

It’s important to understand that searching the court for civil judgments will not cover judgment liens, and it’s these liens that pose a threat to the creditor’s priority position for collection, much like a UCC filing. If you’re conducting due diligence for a financial transaction, it’s recommended to search the appropriate filing office for judgment liens to protect your interests.


Judgment Liens vs. Property Liens

While judgment liens are granted by courts without the debtor’s consent, property liens work differently. These liens are authorized by the debtor, who willingly gives up rights to their property. So, unlike judgment liens, property liens are considered  consensual. For instance, when assuming a substantial loan, such as a mortgage or a car loan, the lender may demand security or collateral.

In this situation, the creditor may impose a lien on your property. This action ensures that the creditor can initiate foreclosure proceedings on the property if you fail to meet the loan obligations.


What Is a Statutory Lien?

A statutory lien is a type of lien that is based on legal statutes rather than common law or a contractual agreement. Two common examples are mechanic’s liens and tax liens.


What Is a Mechanic’s Lien?

A mechanic’s lien is a type of lien often used in construction projects. If the property owner fails to pay a contractor for their work, the contractor can put a lien on that property until the debt is settled.3


What Is a Tax Lien?

A tax lien is a type of lien imposed by the federal, state, or local government on a person or business as a result of their failure to pay taxes they owe. As the Internal Revenue Service (IRS) explains it, “The lien protects the government’s interest in all your property, including real estate, personal property, and financial assets.” The IRS says it will release its lien within 30 days after the debt is paid off.4