New York City Debt Collection Defense Attorney

Judgment Liens Explained: What Debtors and Creditors Need to Know

A judgment lien arises when a court rules you owe a debt, allowing the creditor to claim your nonexempt property until the debt is paid.A judgment lien is created after the entry of a judgment.

If you have been sued and either failed to formally respond (resulting in a default judgment) or were defeated in court (losing on the merits of the case), you become the judgment debtor. Consequently, your nonexempt property may be 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.

13 characteristics of a judgment lien:

  • A judgment lien is a quick, simple and inexpensive enforcement procedure. Example: A creditor can easily file a lien against a debtor's property with minimal legal fees, rather than pursuing more complex enforcement methods.
  • Typically, the creditor does not take possession of the property on which the lien has been obtained.[1] Explanation: The lien acts as a claim against the property's value, not a direct takeover of the property itself.
  • The creditor may simply sit back and wait to get paid when a debtor needs to sell or refinance the property. Example: If a debtor decides to refinance their mortgaged home, the lien must be satisfied before the refinancing can proceed, ensuring payment to the creditor.
  • An improperly docketed and indexed judgment, including name misspelling, could potentially 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. Example: A judgment filed against "Jon Smith" won't affect property owned by "John Smith," protecting an innocent buyer who purchases property from "John Smith."
  • 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. Explanation: This means converting the out-of-state judgment into a local one, legally recognizing it in the state where enforcement is sought.
  • A judgment lien on real property establishes priority over later claimants. Example: If a property is subject to multiple debts, the first recorded judgment lien takes precedence in being paid off over later ones.
  • A judgment lien attaches to practically all of the debtor's real property in the county where the judgment was entered. Explanation: This may include land, buildings, and certain fixtures on the property in that county.
  • A judgment lien attaches to the debtor's after-acquired property provided the judgment is docketed in the same county as the real property. Example: If the debtor buys new property in the same county after the lien is issued, the lien automatically applies to this new property.
  • The judgment lien sticks to the property and assures priority to the judgment creditor as to after-acquired interests. Explanation: The lien remains with the property even if it changes hands, ensuring the creditor's claim is prioritized for any new interests in the property.
  • 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. Example: A debtor who files for bankruptcy cannot eliminate a lien that was perfected on their property three months before the bankruptcy filing.
  • 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. Explanation: Because the debtor's assets aren't immediately seized, they can continue business operations, which lessens the financial strain that might otherwise lead to bankruptcy.
  • 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. Example: This legal notice effectively prevents the sale or transfer of the property until the debt covered by the lien is paid off.
  • A judgment creditor can apply for an installment payment order to seize money you'll be receiving in the future, such as rental payments. Example: If the debtor is a landlord, the creditor can obtain a court order to divert future rental income from tenants to satisfy the debt.

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

Collection Defense Intake Form: The Langel Firm


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