The Texas Judgment Lien Does Not Have Absolute Power

The power of the judgment lien in Texas is in its ability to attach your court ordered debt to the defendant's real estate. Afterwards, when he chooses to sell that property, your attached interest requires him to pay you with the receipts of the sale. It is only after you get paid off that you offer a release of your interest in the property. That makes the judgment lien a remarkably effective instrument. Even more impressive is the fact that the lien attaches to any real estate asset your debtor purchases or inherits even after you have perfected it. After Acquired Property That's right. Your secured interest is not limited to real estate the debtor owns on the date you establish the lien. It also applies to any non-exempt real property he gets at any time afterwards. Therefore, if he acquires a rent house after you secure your interest, your interest affixes to that rent house. Inherited Land When a person passes away in Texas, his possessions immediately pass to and become the property of his heirs. However, those possessions are first subject to payment of the liabilities of the deceased. This is actually true whether the person passes away with or without a will.

Assuming that you have an award of money damages against one of the beneficiaries, it instantaneously affixes to the inherited land. Of course, the administrator of the estate can sell the land free from your interest. But, he may only do so to pay liabilities of the estate. If the estate has no debts, your lien remains attached to the real property inherited by the debtor. Texas Exemptions and Limitations While the power of a judicial lien in Texas looks really good from a creditor's point of view, you must understand that there are still some restrictions in place. The first limit is that it does not attach to all property of the judgment debtor. It is actually restricted to only real estate. It has no effect on the personal property of your debtor. And, even the consequence on real estate has restrictions. Let me illustrate. Suppose your defendant possesses a residence in Texas. You would assume, obviously, that your interest attaches to that home. Nevertheless, a judgment lien in Texas does not affix to a defendant's residence because Texas specifically exempts the homestead from a judgment that does not directly involve the purchase price of the residence. It is called the "homestead exemption." What it means is that your judgment has zero effect on your defendant's home. Now, it is essential to make somewhat of a technical distinction here. Theoretically, your lien does not fasten to the residence. However, the reality of your asserted interest does produce a cloud on the title to the home. In other words, the very fact that you have an abstract of judgment on file will make it tough for your defendant to sell his home since your lien establishes a question of ownership. Legally, it is called a "cloud" on the title.

Because of this "cloud," you will inevitably have to furnish the defendant a discharge as to his residence. You do not have to do it until the debtor asks you for it. But, if the debtor does ask for a discharge, you are under a duty to provide it to him. You should consult with a lawyer to draft the discharge for you to ensure it is properly worded to only discharge the homestead property. If you do not furnish him the release as to the homestead, he may sue you for damages.

Conclusion As you can see, a judgment lien in Texas is an effective collection instrument. Its power appears in its ability to fasten to both the current and after acquired real estate holdings of your judgment debtor. Nevertheless, its potential is not absolute because Texas does exempt the homestead from the claim generated by any civil order for payment of money that is not directly connected to the purchase price of the homestead itself.

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