A judgement lien is a legal claim against a debtor’s property that arises when a court grants a judgement in favour of a creditor in a lawsuit. The judgement serves as evidence of the debtor’s obligation to pay a debt, and the judgement lien attaches to the debtor’s real estate or personal property, depending on the jurisdiction. Once a judgement lien is placed on the debtor’s property, it becomes a public record and may affect the debtor’s ability to sell or transfer the property, as the lienholder typically has a priority claim to the proceeds from the sale to satisfy the debt. Judgement liens can be enforced through various means, such as foreclosure on real property or seizure and sale of personal property, to satisfy the outstanding debt owed to the creditor.
A lien on the property of a debtor resulting from a court’s judgement.
A judgement lien is a court-ordered lien on a debtor’s property, granted to a creditor to compensate for unpaid debts. A judgement lien typically arises after a lawsuit: a plaintiff who is awarded a monetary amount becomes a “creditor,” and the defendant who must pay that amount becomes the “debtor.” The judgement of this monetary amount is the basis for a judgement lien. Should the debtor fail to pay, the creditor can opt to enforce the judgement – through a judgment lien. In other words, a judgement lien is used to secure payment to a creditor and is enacted only after a debtor refuses to pay voluntarily. A judgement lien is satisfied when the property that is subject to the judgement lien is sold and the sale proceeds go to the creditor. A judgement lien that is placed on personal property is referred to as an attachment.
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This glossary post was last updated: 29th March, 2024.
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