Bankruptcy In Florida: What Is A Judgment Lien?

As a consumer bankruptcy attorney, I regularly meet with people who are being sued in foreclosure, by a credit card company, or by a debt collector, and they are contemplating filing for bankruptcy protection.  Interestingly, when a creditor receives a judgment against a debtor and records same in the public records, the judgment creates a lien on the real property of the debtor.  The  simple procedure of filing a judgment in the public records can create major issues down the line for the debtor.

If a debtor files for bankruptcy protection, then the issues can easily be resolved in the bankruptcy court.  The debt underlying the judgment may be discharged.  If the debt is discharged, then you must decide what the lien attached to.  If the debtor does not own any real property, then the recording of a judgment should not be a problem, Right?  Wrong, twice this week I have had to explain to mortgage professionals that a judgment is only a piece of paper that says my client owes money.  The lien is created when the judgment is recorded in the county records.  However, a judgment lien can only be created on real property.  If the debtor does not own real property, the judgment lien cannot attach to anything.

If the Debtor does own real estate, then the judgment lien can attach to the homestead or other real property of the debtor.  The public records where the judgment is filed do not differentiate between the homestead of the debtor or non-homestead property of the debtor.

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