Yes. Creditors who have obtained judgments for unpaid debts can register these judgments to create liens against real property. This is a separate process from banks obtaining mortgage liens, which are agreed upon and established through contracts.
Two questions I'm often asked:
- Can my debt collector put a lien on my home?
- For how long is that lien effective?
For these answers, we look to New York CPLR § 5203 [Priorities and liens upon Real Property]. This section represents the third entry in my blog series that seeks to summarize all 53 sections of New York's Statutory Code "Enforcement of Money Judgments."
A money judgment—even one arising from a small credit card debt—can result in a lien on your home and any other real property.
"Docketing" of Judgment Creates the Lien
A money judgment becomes a lien on the judgment debtor's real property. It secures a priority for the judgment creditor when the judgment is "docketed"[1] with the county clerk of the county in which the real property is located. Docketing creates a lien.
To constitute the docketing of a judgment to create a judgment lien in New York, the process involves filing a Transcript of Judgment with the County Clerk's Office. This transcript is requested from the City Court Clerk and filed with the County Clerk for an additional cost. Once filed, the judgment becomes a lien on any land owned or acquired by the debtor in the county, affecting their ability to sell or obtain credit.
The Lien is Effective for 10 Years
A properly docketed judgment creates a lien on real property for 10 years, even though a judgment is enforceable for 20 years. But the 10-year period begins to run upon filing the "judgment roll" (which, as addressed in the footnote, can happen before the docketing). A judgment creditor can renew[2] that lien but must do so before the expiration of the 10 years.[3]
If the debtor owns property in a different county, a Transcript of Judgment can also be obtained and filed in that county.
How the Homestead Exemption Works in New York
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Renewing Judgment Liens in New York
- A properly docketed judgment creates a 10-year lien on real property and is enforceable for 20 years. Creditors can renew the lien for another 10 years, up to two times, by following the procedures outlined in CPLR 5014. These include filing a motion with the court, serving the judgment debtor, and attending a hearing to demonstrate the lien's validity and necessity of renewal.
- Failing to renew a judgment lien does not invalidate the judgment but means the lien no longer effectively "secures" the judgment, and the creditor cannot foreclose on the property if the debtor does not pay the debt.
CPLR 5203: Priority and Lien of Money Judgments on NY Real Property
- In New York, a money judgment creates a lien on the judgment debtor's real property from the time the judgment is docketed with the county clerk. The lien remains effective for ten years, subject to certain exceptions.
- The court may extend the lien's effectiveness beyond ten years if the judgment creditor was stayed from enforcing the judgment or if additional time is necessary to complete the sale of real property under an execution delivered to a sheriff before the expiration of the ten years.
- A judgment effectuating a court's determination of real property ownership is deemed entered and docketed on the day preceding the determination date for establishing priority against a simultaneous or later bankruptcy petition, provided the judgment is docketed within thirty days of the determination.
Docketing Judgments and Renewal Liens: Two New York Cases
To create a lien on real property, a money judgment must be properly docketed with the county clerk where the property is located, under the correct surname of the judgment debtor (Kunin v. Guttman, 181 A.D.3d 880 [2d Dept. 2020]; Fischer v. Chabbot, 178 A.D.3d 923 [2d Dept. 2019]). For renewal judgments obtained after the initial ten-year lien lapses, the second lien is effective upon docketing the renewal judgment (Wilmington Savings Fund Society, FSB v. John, 67 Misc.3d 319 [Sup. Ct., Westchester County 2020]).
Banks, debt buyers, and collection lawyers seek your money and property to satisfy their default judgments. First, they may seek to restrain ("freeze") your bank accounts. Next in line is the wage garnishment if they can find where you're employed. Depending on their collection strategy and the size of the judgment, they may seek to attach a lien on your home.
Here is a brief description of how debt collectors obtain their judgment in a lower civil court and then transcribe the judgment in the Supreme Court to obtain the lien on your home.
The above applies to New York only.
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[1] This "docketing" should not be confused with "entry" of the judgment or with the filing of the "judgment-roll," although in the supreme and county courts the three steps are virtually simultaneous. Entry occurs when the judgment is signed and filed by the clerk. "Docketing" occurs when the basic facts of the judgment are recorded in these alphabetical dockets--the form of this docketing is prescribed in CPLR 5018(c) and is carried out by the clerk--and the judgment becomes a lien on the real property of the judgment debtor in the county as of that moment. N.Y. C.P.L.R. 5203 (McKinney).
[2] CPLR § 5014.
[3] The 10 years begins to run from the filing of the judgment roll, which happens before docketing and can happen in a lower court (not Supreme Court or County Court).