Civil Judgments vs. Judgment Liens: What’s the Difference?
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Originally Posted On: https://ficoso.com/ucc/civil-judgments-vs-judgment-liens-whats-the-difference/
If you’re like me when I was first introduced to this industry, you might be a little confused about the difference between judgments and judgment liens. They are two separate animals, and it’s important to know the difference if you’re trying to determine which to search for when doing your due diligence.
The easy definition is that a judgment is an official decision rendered by the court with regard to a civil matter. A judgment lien, sometimes referred to as an “abstract of judgment,” is an involuntary lien that is filed to give constructive notice and is to attach to the Judgment Debtor’s property and/or assets.
When we’re talking about a judgment, it’s up to the winning party to enforce or collect upon the judgment. A copy of the judgment itself will be filed with the court where the case was heard.
If the judgment debtor (losing party from the civil case) fails to voluntarily satisfy the judgment, a judgment lien is a way to ensure that the court’s judgment is enforced. A judgment creditor (winning party from the civil case) will file the lien against the judgment debtor in order to secure their position to collect on the debt they are owed as a result of the civil judgment. In general, the lien is satisfied with the sale proceeds when the debtor sells the property or when a refinance occurs.
It’s important to note that searching the court for civil judgments will not uncover judgment liens, and the liens are what will jeopardize the creditor’s priority position to collect, much like a UCC filing. If you’re searching as due diligence for a financial transaction, it’s always a good idea to search the proper filing office for judgment liens to protect your interests.