After a judgment is entered a judgment creditor typically begins execution efforts in order to collect on the judgment, but sometimes a debtor genuinely has nothing for a judgment creditor to collect. In these cases our firm typically recommends that the judgment creditor should cease execution efforts and come back to the judgment at a later date. When the economy is suffering, like it has been for the last few years, this situation arises with much more frequency. Judgment creditors who obtained judgments at the very beginning of the current economic downturn are now approaching a deadline that must be addressed in order to maintain lien priority on their judgments. If you are a judgment creditor and you would like to ensure that you can execute on your judgment lien at a later date, then you must follow the procedures outlined below.
The entry of judgment in Pennsylvania acts as a lien on all real property of the judgment debtor in the county in which the judgment has been entered. In Pennsylvania, a judgment lien is fully effective for five years, and is governed by the five year statute of limitations. 42 Pa.C.S.A. § 5526. The term “fully effective” is more appropriate here than the term “valid” in describing the effect of the statute of limitations on a judgment lien, because a judgment lien will still be a lien on real property after the five year period has expired but it will not maintain its original priority. See, Home Consumer Discount Company of Wilkes-Barre v. Hashagen, 35 Pa D & C 668 (Common Pleas 1985), Mercer County State Bank v. Troy, 27 Pa D & C 3rd 751 (Common Pleas 1983), Popatak v. Evans, 1995 WL 864523, 26 Pa. D & C 4th 244, (Common Pleas 1995).
To maintain the priority of a judgment lien a judgment creditor must revive the judgment itself within the five year period after judgment has been entered. In order to revive the judgment lien a judgment creditor must file a Praecipe for Writ of Revival. See, Pa.R.C.P. 3025. The Writ of Revival (“Writ”) is the “equivalent of a complaint in civil action,” however there are a few subtle differences. Pa.R.C.P. 3029. The judgment creditor must file the Praecipe for Writ of Revival and then the Writ will be issued and indexed against each judgment debtor. See, Pa.R.C.P. 3027. At this point the Writ must be served within ninety days, instead of the thirty day period permitted for a complaint. Pa.R.C.P. 3028. The judgment debtor will then have time to respond and dispute the validity of the judgment or the amount currently owed, and a default judgment may be entered against the judgment debtor for failure to do so which will prevent the judgment debtor from objecting to the revival at a later date. Pa.R.C.P. 3031. This does not create another judgment, but merely governs the rights of the judgment debtor to object to the revival. Entering the default judgment is a very important step that can be easily overlooked, and failure to do so can create unnecessary headaches during later attempts to execute on the revived judgment lien.
This does not mean that a judgment lien will be effective forever without revival, as some courts have held that a judgment lien cannot be revived more than ten years after the date of entry. For instance, in US v. Shadle,1992 WL 551290, 16 Pa D & C 4th 297 (Common Pleas 1992) the court, in interpreting § 5526, held that a judgment lien is fully valid for five years from the date of entry and § 5526 begins running after that period for another term of five years. Id. at 302. If the judgment lien is then not revived before ten years have passed from the original date of entry “’the lien created by the judgment is forever lost.’” Id. quoting Dauphin Deposit Bank & Trust Co. v. Verhovshek, 18 Pa. D. & C.3d 108 (1980). This case appears to be an outlier, but its existence should make judgment creditors very wary of not reviving within ten years of the date of entry of a judgment, or else a judgment creditor may end up having to appeal a decision on a judgment which has been fully litigated once already or forever losing the judgment lien.
Reviving a judgment lien is a relatively simple procedure that will ensure that a judgment creditor still has the same judgment lien priority against a judgment debtor’s real property when the economic climate eventually changes for them. You should be certain to follow the guidelines listed above as well as the remaining rules governing revival of judgments. See, Pa.R.C.P. 3025-32. This paper has been focused on the general process for reviving a judgment and maintaining judgment lien priority, but there are other nuances for which the Rules of Civil Procedure, particularly the comments, can provide much more detailed guidance. Failure to do so may result in a judgment lien that has lost all priority at best, or a judgment lien that has been completely lost at worst.