What Is A Judgment Lien?

A judgment lien is a court ordered lien that is located against the home or asset when the homeowner simply fails to pay a debt. This doesn't seem like a big deal, but when the homeowner has a judgment lien against his or her home and wants to sell it, the judgment lien has to be paid in full before the home or asset can be sold. Judgment liens can be located against the asset for a collection of reasons such as unpaid reputation card bills, utility bills, division store bills, landscaping or home revising bills, and just about any bill that the homeowner has failed to pay in a cheap amount of time. Any bill that can cause one to end up in court can follow in a judgment lien.

A judgment lien is different than a trust, in that the judgment lien holder cannot foreclose on the home or the asset as trust holder can. Judgment lien holders can quiz, payment, but finally they must wait for the homeowner to sell the asset before they can expect to be paid the money that they are owed agreeing to the judgment. Luckily for the judgment 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 citizen will live in their home for quite some time, the interest can make a judgment lien grow, and grow, and grow over the years so that it is quite large. Dream what a lien of just ,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 ,000 or ,000!

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Of course, judgment liens wish court action. A creditor will take the homeowner to court where the judge will decree 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 judgment lien be located against the property. The judgment lien will then be entered into land records offices for the city or county so that the home cannot be sold without refund of the debt. Once the lien is filed with the land records office, the judgment lien is said to be attached to the property, meaning that it cannot legally be sold without paying off that lien. If the judgment lien is not listed at the land records office, then it means that the debt or lien is not legally attached to the asset and does not need to be paid off to sell the home.

A home or asset can have numerous liens against it, which may gift a question 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 advanced for when a home is foreclosed on. If a foreclosed home is auctioned it will first pay off the first lien, then the second, and the third until there is no money left to pay the debts that are still attached or connected with the home. Of course, all trusts against the house, such as mortgages and home equity loans, would be paid off before the judgment liens, so it's not uncommon for these liens to simply go unpaid because there is no money remaining to pay these debts after the trusts are paid. If there is not sufficient money to pay for all of the judgment liens and trusts on the home or property, they are then wiped out and can no longer be collected on. Of course, the auction will commonly effort to pay for all of these debts, and they are paid for until there is no money. The surmise for this is that the new owner will not be able to get any home equity loans or second mortgages with judgment liens already on the home. If there is money left over after all is paid off, the remaining amount would go to the foreclosed homeowner as all debts are paid.

You can look for judgment liens at the land records office, though you will typically not find them listed with trusts. Investors or homeowners seeing to sell their home will have to look into both trusts and judgments, as they are listed in different areas. Investors can often be caught off guard when they perceive how much debt is attached to the home, and sellers are often startled at old judgment liens that they had forgotten about and don't want to afford to pay off in order to sell their home. It's a good idea to go over all of this information before one bids on a home or attempts to sell it or put it on the market.

Judgment liens are not something that whatever wants put against their home, but they are common enough. There comes a time for many citizen when they simply cannot pay a bill, and a judgment lien is ordered. Production a prolonged effort to pay down the debt is a great idea so that you don't fetch large interest fees in expanding to the preliminary dollar amount of the lien. The homeowner does not have to wait until the home is sold to pay off the lien, instead they can be paid off as soon as possible. The judgment lien is simply put in place so that the home cannot be sold without the debt being paid, and when you look at it from the creditors point of view, this is a great tool to ensure that you'll eventually be paid the amount you are owed in expanding to an interest fee that will pay you for waiting.

What Is A Judgment Lien?