I am not a lawyer, I am a Judgment Broker. This article is my opinion, and not legal advice, based on my experience in California. Laws vary in each state. If you ever need any legal advice or a strategy to use, please contact a lawyer.
Recording a judgment lien used to be the most popular and cost effective way to recover most judgments. Due to the economic mess, liens are not as reliable or as wise of an investment as they used to be.
There are many kinds of liens that generally can be classified as being one of two types; real estate liens, and non-real estate liens.
Depending on which state you are in, there are usually three kinds of liens used in the recovery of judgments: real estate liens, UCC liens, and liens created by having a judgment debtor personally served with a judgment debtor examination.
All regular judgment liens expire, however most can be renewed. Usually, real estate liens last as long as the underlying judgment. UCC liens last an average of five years, and debtor examination liens usually last one year.
In judgment recovery, the most popular type of liens are real estate liens. When the judgment debtor's property is sold or refinanced, the judgment is sometimes partially or fully satisfied, in exchange for the creditor removing the lien.
In California, to record a real estate lien:
1) Fill out an Abstract Of Judgment form. You can get this form at the court or the court's web site. Make two paper copies.
2) Bring or mail the two paper copies to the court. Pay the court, to have the court stamp and endorse the Abstract Of Judgment forms. They keep one copy, and give you the second copy. Make a copy of that, or the court can print an extra copy for you for a nominal fee.
3) Bring or mail two copies of the Abstract Of Judgment to the county recorder where the judgment debtor's property is located. Pay the recorder to record your abstract of judgment, and pay them to mail a lien notice to the judgment debtor. The county recorder will keep one copy of the Abstract Of Judgment, and return their endorsed copy to you. County recorder policy varies by county and state, so always verify the details at the court or their web site.
UCC liens are usually recorded when the judgment debtor is a business. UCC liens are sometimes also recorded for non-business judgment debtors.
To record a UCC lien, download a UCC form from your Secretary Of State's web site and fill it out. Writing the judgment information and case number, and a description of the judgment debtor's assets on the UCC form, can make that lien stronger.
Mail the completed UCC form to the Secretary Of State with a check, and wait for them to mail a copy to you. Then, mail a copy of the endorsed UCC form to the judgment debtor.
In California, having a judgment debtor personally served with a judgment debtor exam, creates a lien on their personal property for one year. Writing a description of some of the judgment debtor's personal property on the front or back of the debtor examination forms and affidavits, may make this kind of lien stronger.
The most common way a judgment creditor may get paid by recording a real estate lien, is if or when the debtor sells or refinances their property, because sometimes lenders and buyers require or arrange for prior recorded liens to get paid off.
Sometimes recorded liens can make you a secured creditor if your debtor files for bankruptcy protection. Once in a while, you might eventually get paid something after your judgment debtor files for bankruptcy protection.
Getting and recording judgment liens does not guarantee that a judgment creditor will get paid.
In fact, usually, these days, recording liens will not result in any payment. However, getting and recording a lien is not difficult or expensive, and may be a good first step to eventually getting paid.
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