A judgment lien is a restriction on property ownership due to a court ruling that a defendant owes a plaintiff money. The court may seize assets, garnish wages, or place a lien on property. The lien limits the defendant’s right to sell, and the proceeds must be used to satisfy the judgment. The lien is removed when the damages are paid.
A judgment lien is a limitation placed on property title as a result of a court ruling. A judgment is a decision made by a court that a defendant owes a plaintiff money. If the defendant cannot pay the money, a judgment lien may be placed on the defendant’s home or other tangible property.
When a person is sued, the individual has the opportunity to present a case and defend himself. If the defendant loses the case, the judge or jury generally provides a cash award for the plaintiff. This judgment must be paid by the defendant, and the judgment is listed in the public records section of the defendant’s credit report in the United States.
Often, a defendant is unable to pay a judgment in full. The court can then do one of several things depending on the situation. The court may seize the defendant’s assets for a forced sale or a sheriff’s sale, it may garnish the defendant’s wages, or it may place a lien on the defendant’s property.
Usually, a court will not seize and sell assets unless the sentence is a default judgment on a secured asset. For example, in a foreclosure action, the court will allow the bank to take and sell the defendant’s home after the bank sues for foreclosure. This is common in such a situation because the house is collateral for the debt and therefore an attachment and sale is appropriate.
In many situations, however, the court will instead place a judgment lien on the property instead of seizing and selling the assets. This is a notation on the title of the property that limits the defendant’s right to sell. When a judgment lien is attached to property, the proceeds from the sale of the property must be used to satisfy the judgment immediately following the sale.
The lien will be removed from the property if and when the defendant pays the damages required by the judgment in full. It is often difficult for a defendant to sell a property that has a lien on it, as most banks will not allow a mortgage on a property unless it has clear title, and title searches are almost always done before a property can be sold. Title insurance companies also check to determine if a property has liens on it and will provide a guarantee to pay any judgments or damages associated with the property if title is later found to have a lien on it.
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