Debt Collection Strategies – Judgment Liens in Pennsylvania
Black and Davison
If you’ve filed a lawsuit against an individual or business that owes you money and the judge or jury has ruled in your favor, the court will then issue and enter a judgment against the debtor, ordering the defendant to pay the debt. However, that would not necessarily put money in your pocket. A court order, by itself, is typically not enough to ensure payment. That’s why you need a judgment lien.
Understanding the Concept of a Judgment Lien
A judgment lien gives a creditor the right to be paid out of the proceeds from the sale of property. Under the law, the lien is filed and “attaches” to the named property. Accordingly, when the property is sold, the lien goes into effect, giving the creditor named in the lien priority over other potential recipients of the proceeds of the sale, including the debtor.
In some states, a judgment lien can attach to any property owned by the debtor. In Pennsylvania, though, a judgment lien can only be placed on real property.
To obtain a judgment lien, you must first record the judgment with the court of common pleas in the county where the debtor owns property. The lien will stay in effect for five years, but can be renewed, if the debtor does not sell the property within that time period.
Even though you have a judgment lien, there may still be other parties with priority over you:
- The debtor will have priority if the property is a primary residence (this is known as the homestead exemption)
- Other parties may have priority in a bankruptcy or foreclosure proceeding
- Other liens may have been filed first or otherwise have priority