If a creditor files a lawsuit against you and obtains a judgment lien, your personal property is at stake. Here’s how that happens, and what we can do to stop it.
If you’ve recently received notice that a Kentucky judgment lien has been filed against you, you may be wondering what it is, how it works, and what the ramifications are for you and your family.
A judgment lien is a court ruling that allows your creditor to come after your home, real estate land/property, and/or personal property (such as vehicles, appliances, and furniture) when you haven’t paid your debt.
Here’s how a judgment lien works.
So how exactly does a creditor obtain a judgment lien? When you owe money to your creditor and don’t remain in compliance with the terms of agreement (i.e. you don’t pay what you’re supposed to pay, when you’re supposed to pay it), your creditor can sue you to get the money that they’re owed.
If you don’t respond to the lawsuit, or if you do respond but the court doesn’t rule in your favor, the Court will create an official judgment for the creditor. This means that the court officially decides that the creditor is owed the total amount of money that they originally loaned to you, plus accrued interest.
After the creditor obtains the judgement, the creditor has the option to file a judgment lien against you. When a judgment lien is filed, the creditor is legally given permission to put a lien on any property that you own, which means that they’re allowed to take your property and sell it in order to satisfy the amount that’s owed in the judgment (the original amount that was lent in the loan).
Your real estate and other personal property will be taken from you if your creditor obtains a judgment lien against you. The only way to stop this is to immediately file for bankruptcy.
Here’s an example: A debtor owes a creditor $20,000 and hasn’t paid it back, the creditor sues the debtor, and the debtor doesn’t respond to the lawsuit. The court rules in favor of the creditor, which means that the court officially decides that the debtor has to pay back the $20,000, plus interest.
The creditor feels strongly that they aren’t going to get paid, so they file a judgment lien, which allows them to seize your home and use it as collateral. The creditor sells your home, and then takes the money that they make from the sale in order to get their $20,000 back (plus interest).
If this situation sounds familiar, we’re here to help you. We know that the prospect of having your Kentucky real estate and/or personal property taken from you is scary. While the circumstances are overwhelming, they’re not hopeless.
Filing for bankruptcy can protect you from the judgment liens that you are facing, and help you get on a stable financial path. Call or text Louisville Attorney Tracy Hirsch at (502) 435-2593 to learn more.