I am providing additional information to my prior question re "forcing a lien." My parents received a civil judgment in the form of a lien against an individual's home. The individual tried to refinance his home and was unable to do so because of the lien. A real estate attorney friend of mine asked me why my parents haven't tried to "force the lien," in other words, force the home owner to pay the judgement before he sells the home or dies. He said that in the state of Illinois, if one receives a civil judgement in the form of a real estate lien, you can can force the lien and make the individual pay before he/she sells the property or dies. Is this the case in the state of CA?
4 Answers from Attorneys
You are still pretty confused about legal terminology, but at this point I at least understand what you seem to mean. You are asking if they can ENforce the judgment by EXECUTING on the lien. The answer is "maybe." First off, they did not receive a judgment "in the form of a lien." They obtained a judgment or they did not. If they obtained a judgment they had the right to enforce the judgment through various means. One is to record an abstract of judgment with the county recorder in any county the defendant might have real property. That abstract of judgment creats a lien on any property the defendnt owns in that county. If the defendant was blocked from a refinance, it sounds like, but it is not certain, that they have an abstract of judgment in the county where the property is located. That is not certain, however, since a judgment on the defendant's credit may block a refinance even without a properly recorded abstract of judgment. Even if they have a properly recorded abstract of judgment, they still may or may not be able to enforce the judgment by action against the property. You can't enforce a judgment against a property if the property has no net equity. Also, there is an automatice homestead exemption that applies to the defendant's primary residence. How much that exemption is worth depends on the details of the defendant's circumstances, including marital status, age, and any disability. IF there is net value in the property after any mortgage debt and the applicable homestead exemption, AND the judgment creditor has a properly recorded abstract of judgment, THEN the judgment creditor can ask the court for a writ of execution that would order the sherrif to sell the property.
When a judgment is issued, it can become a lien that is perfected against real property by the recordation of an "abstract of judgment." Notice the terminology that I use, between a lien, and perfecting the lien. Perfecting the lien means third parties are on notice about the lien. The lien itself does not prevent transfer or refinancing, it just means third parties will take the property subject to the lien, because they knew or should have known about it. In a typical refinancing situation, a new loan secured by a new deed of trust is created. When the new deed of trust is recorded, it is subordinate to any existing liens of records (there are a couple of exceptions.) So that is why the lender does not want to approve of the refinance.
Without the refinance, however, the property is encumbered by an existing deed of trust, which is probably senior to the abstract of judgment. (Meaning it was executed and recorded before the abstract of judgment) In order to satisfy the judgment, the judgment creditors would have to show that a forced sale of the property - called a sheriff's execution sale - would be enough to satisfy the prior encumbrance, the automatic homestead exemption, and have enough left over to pay at least a portion of your judgment.
Given the current economic situation, this is highly unlikely.
For starters, if this is about a judgment and property in Illinois, you need to stop asking questions of CA attorneys. Only ILL law applies, and only ILL attorneys can give legal advice or help you, so ask an ILL attorney.
However, in general the rules are similar in all states, but you still don't understand the process. If someone obtains a court money judgment against a defendant, and then properly ''records'' that judgment with the County Recorder in a county where the defendant has real property in his name, the judgment creates what amounts to a lien against the real property, because the property can't be sold, financed or transferred without paying off the judgment. What you were trying to ask about, or should have understood, is that the judgment can be 'enforced', meaning collected, against any assets of the defendant you can locate. That includes bank accounts, vehicles and real property. If there would be any equity remaining in the real property after selling it and paying off all the mortgages, notes, liens, taxes, costs of sale, commissions, etc., then you could levy your judgment on the property by getting the proper Writ and court orders to give to the Marshall or Sheriff, who will seize and sell the property, pay off all those costs from the proceeds, and then turn over to you the amount of your judgment. Usually the notice of levy on the property causes the defendant to settle with you to avoid sale.
Now, if this property IS in CA, then feel free to contact me for the legal help you clearly need.
All three prior responses are accurate discussions of the situation presented by your question. There are no significant contradictions in the legal advice. Also, it seems clear to me that the property and the lien in question here are in California. There are a lot of lien holders waiting for the real-estate market to improve sufficiently that enforcement of their liens will result in a net recovery (including myself). In the meanwhile, judgment liens are a decent "investment" in that they accrue interest at 10% simple per annum.
Related Questions & Answers
In the state of CA, can you force a lien in a civil judgment? Asked 12/07/12, 7:32 am in United States California Real Estate and Real Property