If you are pursuing a refinancing or sale of your home or property, the process may come to a screeching halt if you discover that someone has placed a judgment lien on your property. To proceed with your refinancing or sale, you will need to know how to dispute and remove the lien from your property.
Judgment Liens on Property in CA
When a party (known as a judgment creditor) obtains a California court judgment against a person (called a judgment debtor), and that person does not pay or satisfy the judgment, the judgment creditor may be entitled to file a lien against the judgment debtor’s real property in California. A judgment creditor who wishes to obtain a judgment lien against the judgment debtor’s property must file an abstract judgment with the recorder’s office in the county where the judgment debtor’s property is located.
Once a judgment lien is placed on a piece of real estate, that property cannot be sold or otherwise transferred unless the lien is satisfied or removed.
What to Do If a Judgment Lien Is Keeping You from Refinancing or Selling
If you have a recorded judgment lien on your home or other property, that lien can prevent you from refinancing your mortgage or selling the property. A bank will not issue a loan secured by real estate that may end up seized to satisfy the judgment lien. Furthermore, a purchaser of the property will not move forward with the sale when the property has a cloud on the title.
If a judgment lien is keeping you from refinancing or selling your home or property, you have several options for disputing and removing the lien from your property.
First, you can satisfy the judgment lien by paying the amount of the judgment. Depending on how long ago the judgment was entered, you may also need to include additional amounts for interest and fees. If you contact the judgment creditor, you may be able to negotiate a payment plan in exchange for the immediate removal of the lien.
Alternatively, you might wish to consider contacting the judgment creditor and negotiating a lower payoff amount if you cannot afford the total judgment. Some judgment creditors may be willing to accept a lower amount as a lump sum payment. Suppose you satisfy the lien by paying the judgment or negotiating a payment plan or lower lump sum settlement. In that case, you will need to make sure that the judgment creditors file a satisfaction of judgment with the appropriate court so that the lien can be removed from your property.
You might also remove a judgment lien from your property by filing for bankruptcy. Bankruptcy may allow you to avoid or discharge the judgment debt and thereby remove the lien from your property.
Finally, you may have the option to remove the lien by seeking a court ruling that invalidates the lien. A court may invalidate a judgment lien that was obtained without following the proper procedural requirements. Courts may also order a lien invalidated if it can be proven that the lien was obtained in bad faith or for an improper purpose. Examples of bad faith could include harassing or coercing the property owner. Improper purpose can include fraud upon the court.
How a Lawyer Could Help
An attorney can help you remove a judgment lien from your property so that you can pursue refinancing or sale of the property by:
- Identifying who filed the judgment lien and reviewing the underlying court judgment against you
- Going over your legal options for removing the line, including satisfying the judgment or filing for bankruptcy
- Negotiating a payment plan or lump sum settlement to satisfy the judgment and ensuring that the creditor takes the steps to clear the lien off your property’s title
- Pursuing a court case to remove an invalid or improperly obtained lien
If you have a judgment lien want to dispute and remove on your home or additional real estate, contact Wagner Zemming Christensen, LLP today. Our knowledgeable California real estate attorneys can provide a confidential case evaluation to discuss how we can help you protect your legal rights and interests.