Once a court reaches a determination that one party owes another party money, the court issues a judgment. A judgment, quite simply, constitutes a judicial determination that one party owes another party money and nothing more. Once a judgment creditor obtains such a judgment, the judgment creditor must undertake efforts to collect the money that is owed by the judgment debtor. Based on the judgment, the judgment creditor may obtain a judgment lien against the property of the debtor or such a lien may arise by operation of law. The laws governing judgment liens vary widely from state to state.

Fact Scenario

After consuming an excessive quantity of alcohol, Jared crashed his car into the rear of Sarah's car while Sarah was stopped at a traffic light. As a result of the collision, Sarah sustained personal injuries, as well as property damage. Sarah filed suit against Jared and succeeded in obtaining a money judgment against Jared in the amount of $10,500. Sarah wishes to collect on the money judgment and begins her efforts to do so by seeking a judgment lien against certain real property owned by Jared.

Formalities

The laws of each state must be consulted to determine the applicable formalities. Generally speaking, however, in order to obtain a judgment lien, a judgment creditor must first obtain a valid judgment. A judgment cannot constitute the basis of a judgment lien unless the judgment was rendered by a court of competent jurisdiction and the judgment itself is valid in all respects. Furthermore, the judgment debtor is entitled to notice of the judgment lien. Lastly, the judgment creditor must file the judgment lien in the appropriate public office or public offices so as to give others notice of the existence of the lien against the judgment debtor's property.

The Rights of a Judgment Creditor

In the event the judgment debtor fails to satisfy the judgment, the judgment creditor may initiate proceedings to foreclose the judgment lien.

Other Considerations

A judgment lien only extends as far as the judgment debtor's interest in real property. Moreover, certain property of the judgment debtor may be beyond the reach of a judgment creditor. For example, laws exist in many states that afford a judgment debtor an exemption for the judgment debtor's interest in a homestead and certain other property. To the extent the amount of the judgment exceeds any applicable exemptions, the judgment creditor may still recover.

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