Can a Debt Collector Place a Lien on my Home? Yes, Here's How.

Yes. Creditors who have obtained judgments for unpaid debts can register these judgments to create liens against real property. This is a separate process from banks obtaining mortgage liens, which are agreed upon and established through contracts. 

Two questions I'm often asked:

1. Can my debt collector put a lien on my home?
2. For how long is that lien effective?

For these answers, we look to New York CPLR § 5203 [Priorities and liens upon Real Property], the section that represents the third entry in my blog series that seeks to summarize all 53 sections of New York's Statutory Code "Enforcement of Money Judgments."

A money judgment—even one arising from a small credit card debt—can result in a lien being placed on your home and any other real property.

"Docketing" of Judgment Creates the Lien

A money judgment becomes a lien on the judgment debtor's real property and secures a priority for the judgment creditor when the judgment is "docketed"[1] with the county clerk of the county in which the real property is located. Docketing creates a lien.

The Lien is Effective for 10 Years

A properly docketed judgment creates a lien on real property for 10 years, even though a judgment is enforceable for 20 years. But the 10-year period begins to run upon filing the "judgment roll" (which, as addressed in the footnote, can happen before the docketing). A judgment creditor can renew[2] that lien but must do so before the expiration of the 10-year time period.[3]

Renewing the Lien

While a properly docketed judgment creates a lien on real property for 10 years, the judgment itself is enforceable for 20 years. This means that a judgment creditor can renew the lien for another 10 years but must do so before the expiration of the first 10-year period. This renewal process can technically be done twice, allowing a lien to be effective for the entire 20-year enforceability period of the judgment. However, this renewal must be done proactively by the creditor; it does not happen automatically.

The specific procedures for renewing a judgment lien in New York are set forth in New York Civil Practice Law and Rules (CPLR) 5014. To renew a lien, the creditor must file a motion with the court and serve it on the judgment debtor. The motion must be accompanied by a copy of the judgment and a certificate of mailing. The court will then set a hearing on the motion. At the hearing, the creditor must show that the lien is still valid and that the renewal is necessary to protect the creditor's interest. If the court finds that the renewal is justified, it will order the lien to be renewed for another 10 years.

It is important to note that the failure to renew a judgment lien does not automatically invalidate the judgment. However, it does mean that the lien will no longer be effective in "securing" the judgment. This means that the creditor will not be able to foreclose on the property if the judgment debtor does not pay the debt.

Banks, debt buyers, and collection lawyers are looking for your money and property to satisfy their default judgments. First, they me seek to restrain ("freeze") your bank accounts. Next in line is the wage garnishment if they can find where you're employed. Depending on their collection strategy and the size of the judgment, they may seek to attach a lien on your home.

Call us at 888-271-7109 or contact us if you're worried about any money judgment, especially if it could interfere with your home's title.

Here is a brief description of how debt collectors obtain their judgment in a lower civil court and then transcribe the judgment in the Supreme Court to obtain the lien on your home.

The above applies to New York only.