When Can You Put A Lien On Someone's Property?

It may be kind to lend money, but it can also be risky. People who owe money don’t always pay it back. Creditors who are owed money may look for other ways to get their money back, whether they are individuals or businesses. One choice could be to put a lien on the debtor’s real estate.

How to Get a Decision

Get a judgment against the debtor if you are an unsecured creditor who is not a contractor who did work on the house. This is the first thing you need to do. A person who is owed money usually can’t just put a lien on property without first getting a court order. To get a judgment, the creditor has to sue the debtor. In many places, this could be done through the circuit court. If the amount being sued is less than a certain amount of money, the case may go to small claims court. To get a judgment, you have to show the judge or jury that the person or business owes the money. To do this, they might have to show a written contract that the defendant signed, if there was one, or prove that an oral contract was valid.

Some defenses may be something that individual creditors need to worry about. For instance, the statute of frauds says that some agreements must be written down. This defense might work against the claim if the contract was only spoken. The statute of limitations tells you how long you have to make a claim. Someone who owes money might not be able to get a judgment against them if they wait too long.

Finding Goods

Once a judgment is signed off on, the debtor may be able to show what assets they have. In many states, once a judgment is secured, the debtor has to fill out a form that lists all of their assets. In states that require this form, there may be ways to avoid having to fill it out, such as paying the amount that is owed or filing an appeal on time. After the judgment, this form is given to the person who won. The judgment debtor can be made to show up in court and answer questions about their assets if they don’t fill out this form. This is possible in some states.

Liens on Real Estate

A judgment creditor can do something with someone else’s property once they find it. The debtor’s real estate can be used as collateral for the lien.

Once the judgment is secured, some states will put a lien on the property of the judgment debtor automatically. In most states, though, the judgment creditor has to file the judgment with the county in order to put a lien on the debtor’s property.

Creditors can put a lien on your home to show that you owe them money. The title won’t be clear until the debt is paid off. If there is a lien on the property, the owner will not be able to sell it or get a new loan for it. If the judgment debtor tries to sell the property, the sale will not go through because the title is not clear. If the debtor wants to sell the house, they may decide to pay off the judgment creditor. To refinance the home, you usually need the same thing. Some of the debtor’s property is not taken into account in most states.

Getting a Lien

Sometimes, a person has to wait until the time to appeal has passed before they can get a judgment lien. From the clerk’s office at the court where the case was heard, the judgment creditor can get an abstract judgment form after this time has passed. Anyone who owns real estate in more than one county must take this abstract of judgment to the office of the county recorder. In a way, this records the lien. Also, the judgment debtor should be told. The property lien stays in place until the debt is paid off or the court order runs out. Most of the time, the judgment lasts for ten years.

A creditor may ask for a writ of execution to take back the property in some cases. Payments on liens come after payments on mortgages. In the event that a lender takes back the property, the mortgage must be paid off before the lien is released. A lot of creditors choose to wait until the property is sold to get the money they are owed so that these problems don’t happen.

Lien for Mechanics

Some creditors may be able to get a certain type of lien called a mechanic’s lien. These are filled out by contractors and subcontractors who work on real estate or make it better. An engineer can put in a mechanic’s lien if the owner of the property doesn’t pay the full amount that was due to the engineer.