Whether due to medical bills, credit card balances, student loans or something else, many Americans are swimming in debt. In fact, according to a recent estimate, the average person owes more than $90,000. If individuals do not stay on top of this debt, creditors may often sue to collect payment.
If a civil lawsuit is successful, a judge in Georgia may place a judgement lien on the defendant’s real property. In addition to unpaid credit card balances or medical bills, judgement liens may also stem from delinquent child support.
Attachment to the property
The purpose of a judgement lien is to ensure the creditor receives payment. When the property sells, some or all the proceeds go to satisfying the judgement.
It is important to note that judgement liens attach to the property instead of to the person who owes the money. This may be true even if the property changes hands.
In Georgia, judgment liens typically last for seven years.
Common problems with judgement liens
The creditor’s ability to collect proceeds from the sale of real property may depend on whether the property is the debtor’s primary residence. If so, the person who owes the money may benefit from the homestead exemption.
Likewise, a judgement lien may be subservient to other types of liens. That is, other lien holders may be first in line to collect any amounts the property owner owes. Bankruptcy and foreclosure proceedings may also interfere with the judgement lien.
Ultimately, as a homebuyer, you want to purchase real property free and clear of all liens. Therefore, before buying a piece of property, you should investigate whether it has a judgement lien or any other hurdle you may need to overcome.