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What is a Judgment Lien?

A judgment lien is created after the entry of a judgment.

If you've been sued and lost the case by default (you didn't formally respond) or you lost on the merits, you are the judgment debtor. Your nonexempt property is subject to a lien.

A lien, generally, is defined as a legal right or interest that a creditor has in another's property, lasting usually until a debt or duty that it secures is satisfied.

A lien is imposed against a judgment debtor's nonexempt property. For a list of exempt personal property, see this blog. For exempt homestead property, see this blog.

See here how a docketed judgment becomes a judgment lien against real property.

Other characteristics of a judgment lien:

  • A judgment lien is a quick, simple and inexpensive enforcement procedure.
  • Typically, the creditor does not take possession of the property on which the lien has been obtained.[1]
  • The creditor may simply sit back and wait to get paid when a debtor needs to sell or refinance the property.
  • An improperly docketed and indexed judgment, including name misspelling, will invalidate the judgment (do a title search to verify proper recordation) and will protect a good-faith purchaser of the land subjected to the improperly indexed judgment.
  • If you seek to enforce a judgment obtained in a different state, make sure your sister-state judgment is reduced to judgment and entered. Mere recordation of a sister-state judgment will not alone produce a lien against real property.
  • A judgment lien on real property establishes priority over later claimants.
  • A judgment lien attaches to practically all of the debtor's real property in the county where the judgment was entered.
  • A judgment lien attaches to the debtor's after-acquired property provided the judgment is docketed in the same county as the real property.
  • The judgment lien sticks to the property and assures priority to the judgment creditor as to after-acquired interests.
  • A bankruptcy discharge may prevent the further reach a judgment lien. But a lien perfected more than 90 days prior to the filing of a bankruptcy petition will remain against the real property belonging to the debtor.
  • A judgment lien is less disruptive to a debtor's business life since there is no immediate physical taking; therefore this lien is less likely to trigger a bankruptcy filing for relief.
  • Filing of a notice of levy in the appropriate county clerk's office will prevent the owner of the property from disposing of that property without first discharging the lien.
  • A judgment creditor can apply for an installment payment order to seize money you'll be receiving in the future, such as rental payments.

Keep in mind friends that this post, along with all others, involve New York laws.

[1] Black's Law Dictionary, 1053 (10th ed 2014).