What is a judgment, and how do you know if you have a judgment lien? Is a judgment only valid for 5 years? Bernstein-Burkley, P.C. Partner, Nicholas D. Krawec, answers these questions and more in this week’s 5 Minute Legal Master Series episode: JUDGMENT AND JUDGMENT LIENS.
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Judgments and Judgment Liens (6:08)
Welcome to the 5 Minute Legal Master series where expert legal attorneys help you master important legal topics. Today, board certified creditors’ rights attorney Nicholas D. Krawec discusses judgment and judgment liens.
Hello. Today I would like to talk about judgments and judgment liens. A judgment is what you are seeking when you file suit, it is that final judicial determination that the debt for while you filed suit to recover is properly due and owing to you from the judgment debtor. Whether or not you have a judgment lien depends on 2 factors: 1. Is your judgment entered in a court of record which in Pennsylvania is a court of common pleas or federal district court. 2. Does the judgment debtor own real estate in the county in which the judgment has been entered to which the judgment lien has been attached. Under Pennsylvania law and procedure, when a judgment on a verdict, order of court or an award in arbitration is entered in the court’s judgment index, it shall continue a lien upon property located in the county that subject to the lien. Create a lien upon all the property located in the county that is in the name of the judgment debtor and if a judgment debtor owns real estate in another committee, you can transfer the judgment in the county it is entered to the court of common pleas in the county of which the judgment debtor owns real estate.
In Pennsylvania a judgment automatically acts as a lien against real estate owned by the debtor in the county in which the judgment is recorded at the time it is entered. Exceptions to the provision include f your judgment is against an individual who is married and the individual owns real estate with his or her spouse as (1:53). In that situation there is no judgment lien against the entireties property if you only have a judgment against 1 of the spouses. If a judgment is obtained but eh judgment debtor is not collectable, you may not have a judgment lean necessarily. For example, the debtor owns real estate but here is presently not sufficient equity in the real estate to satisfy your judgment or sufficient equity for the judgment lien to attach. In other words, the property is worth less than the amount that the defendant owes on it. In this circumstance, the creditor may wait for an improvement in the debtor’s finance circumstances and/or the judgment debtor may seek to obtain finance in the future. That can really be helpful to you, disregard all the stories you may hear about a judgment only be valid for 5 years, that is not accurate. That is the statute of limitations for initiating an action for reviving a judgment lien on real property.
An action to revive a judgment lien against real property has to be initiated within 5 years of the entry of judgment in order to maintain its lien property or the judgment creditor’s place in line against any subsequent intervening judgments and liens. A judgment lien may still be revived after that 5 years statute of limitation period for revival but its priority against intervening liens would be lost. In other words, it would lose its place in line and go to the back of the line.
Let us move on to reviving a judgment lien to attach to after acquiring property. For example, the judgment debtor did not own property at the time you obtained judgment against him but subsequently acquires it. If the judgment debtor did not own real estate at the time judgment was entered but acquires it later perhaps via an inheritance, through a divorce settlement or even a subsequent purchase after the judgment, the key thing to keep in mind is that if your judgment debtor owns real estate, make sure you index your judgment in a court of record in the county in which the judgment debtor has obtained that after acquired real estate.
With regard to personal property of the judgment debtor, even if the judgment debtor does not own real estate the judgment creditor should not necessarily let the existence of prior judgments against the debtor prevent him from executing against personal property. By that I mean, equipment, vehicles, furniture for business. The judgment does not serve as a lien against the judgment debtors personal property, you can still obtain a lien by sending the sheriff out and doing a levy on those items of personal property. It is the sheriff’s levy the creates the lien, that is why say that the creditors should not be discouraged by the existence of prior judgments if it is the creditors intent to issue an execution on the judgment against the judgment debtor’s personal property. You just have to beat the prior judgment creditors to the punch in having the sheriff levied on the judgment debtor’s personal property.
So remember the distinction regarding the effect of a judgment as a lien when you are looking at assets of the debtor out of which to satisfy a judgment. Number 1, the judgment automatically acts as a lien against real estate owned by the debtor in the county where the judgment is recorded at the time is recorded. Your lien priority against real estate is established just by virtue of having the judgment recorded. Secondly, a judgment does not act as a lien against a judgment debtor’s personal property, so you lien priority against personal property is not a established just because you have a judgment. You need to take the affirmative step of executing on the judgment and having the sheriff levy upon the judgment debtor’s personal property. It is the sheriff’s levy that establishes a lien against personal property.
Thanks for listening!
This has been another installment of the 5 minute Legal Master series where expert attorneys help you master important legal topics. For more information on this and other topics please visit 5minutelegalmaster.com