How do I Turn a Judgment Into a Lien?

How do I Turn a Judgment Into a Lien?
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Last updated: May 2012

The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, "Q&A: The Law," runs in the St. Louis Post-Dispatch (Illinois Edition) and the Champaign News Gazette.

Question

I sued and got a judgment against someone. Can I put a lien on their house, and use that lien to get their house?

Answer

Turning a judgment into a judgment lien is easy. Foreclosing on a judgment lien is not. It almost never happens, but doesn’t mean judgment liens are worthless. They can produce payment in other ways.

You turn a judgment into a judgment lien by filing a record of that judgment with the County Recorder. That creates the lien, which applies to all property owned by the judgment debtor in that county. A single filing does the trick, so you don’t have to locate each parcel the debtor may own and file a separate document for each one.

The law says you can file a “transcript” of the judgment; a certified copy of the judgment; or a “memorandum of the judgment.” Most people use a “Memorandum of Judgment.”

That document shows the name and number of the court case, and the basics about the judgment. Those basics include: the exact date of the judgment; the judge who entered the judgment; the dollar amount of the judgment; who the judgment is in favor of and against; and the last known address of the person the judgment is against.

You should also check with your local Recorder about any particular requirements they may have. Many, for example, require the name and address of the person who prepared the Memorandum, and the same info about who it’s supposed to be returned to after filing. They may also want a specific amount of space left blank, in a specific part of the page, for their file stamp.

You can prepare that document yourself. (Some Circuit Clerk’s may have forms you can fill out.) When it’s ready, have the Circuit Clerk’s office date, sign, and seal it.

Then, take the Memorandum of Judgment to the Recorder. The Champaign County Recorder charges $25 to file a 1 page Memorandum of Judgment. They scan it electronically, and return the original to you.

In theory, you can foreclose on a judgment lien. In practice, it rarely happens. Lawyers who have done thousands of collection cases tell me they can only recall a few local examples.

That’s because you must jump through a lot of hoops to foreclose on a judgment lien, and pay a sometimes hefty fee to the sheriff just to get started. And, if it’s the debtor’s residence, that debtor takes the first $15,000 of any sale proceeds off the top, as their legally protected “homestead exemption.” (Married couples combine that to get $30,000.)

And, debtors can often stop a foreclosure sale with a bankruptcy, and wipe out both debt and lien.

But, even if a judgment lien is not worth foreclosing on, it serves a useful purpose. As a “cloud on title,” it must be released before someone—like a buyer—can get clear title. Paying off the creditor to release the lien when property is sold or transferred, then, is usually how judgment liens lead to payment.
 

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