Can You Be Forced to Sell Your Home Due to a Judgment?

When you borrow money from a creditor, you agree to pay off the loan over a specified amount of time. If you cannot pay or if you refuse to pay, the creditor can take the grievance to court. If you fail to appear in court or do not have a substantial defense, the judge can award the creditor a civil judgment. The creditor now has various options available to collect the money owed, including forcing you to sell your home. There are homestead laws that prevent the attachment of a judgment lien to your home in some states. You should check for the existence of these in your state.
 
After the court provides the creditor a judgment for your debt, the creditor can request permission to file a lien on your home. The court gives the creditor a document, the Abstract of Judgment, that allows the creditor to go to the county recorder’s office in your county and file a lien. Your home will not have a clear title until you pay the lien fully. For example, judgment liens in California last ten years. If you are thinking about selling or refinancing your home, you need to pay off the lien first. Once you pay your debt, the creditor must release the lien.
 
The creditor need not wait for you to pay your debt. They can force the sale of your home and use the amount received to pay off the debt that you owe them. Sometimes, a home may have other liens associated with it. In this case, these liens have priority over the judgment lien. The creditor in this situation would be less inclined to force the sale of your home.
 
A lien may expire, and if the creditor fails to renew the lien in time, it must get taken away from your home. In addition, if you pay your debt in full, the lien has to be removed.