Harvey L. Cox answers:

If by ”registered with the county clerk” you mean that the company recorded an abstract of judgment, then yes the abstract does create a judgment lien in Texas against your non-exempt real estate in the county where it is recorded.  But, the important distinction here is that a judgment lien in Texas only attaches to non-exempt real property.  your homestead is exempt from such a lien.

What happens is that the abstracting of the judgment against you does create a judgment lien on all of your real property in the county where the abstract is recorded.  Technically, then, the abstract does create a lien on your homestead property.  But, that lien must be released as to your homestead if you request the judgment creditor to provide a release.  The judgment lien will still attach to your other non-exempt real estate.  But, as to the homestead, it will be released.

If you request that the company release a judgment lien in Texas and they fail or refuse to do so, you can sue them for creating a cloud on the title to your homestead property. Of course, you really don’t want to get yourself involved in the expense of such a lawsuit in my opinion.  So, you really want to go after the release. But, if they just refuse to do it, there is an affidavit you can file to release it yourself.  For details on that process, check out What You Absolutely Must Know If You Owe a Judgment in Texas.

I did recently get sued but I didn’t bother going to court because I couldn’t afford a lawyer.  Besides, I did owe the debt I just didn’t pay it.  Now I get a notice saying that an abstract  has been issued.  What does that mean and should I be concerned?

Harvey L. Cox answers:

In a nutshell it means that the court granting a judgment against you has issued an abstract of that judgment.  An abstract of judgment is simply a written summary of the judgment.  It states how much money the losing party of a lawsuit owes to the winning party in the lawsuit, the rate of  interest to be paid on the judgment, court costs and attorneys fees, if any.

Reason for An Abstract of Judgment

The reason an abstract is issued is so that a record of the judgment can be filed in real property records.  The abstract is usually filed in the real property records of the county where the judgment was entered.  But, an abstract of judgment can be filed in any county where the judgment debtor (lawsuit loser) lives or owns real estate.  The filing of the abstract creates a lien on the judgment debtor’s property and gives public notice that a lien is claimed on the property.

You Should Be Concerned About an Abstract of Judgment

If you have a judgment entered against you (which you are apparently in that situation) and you don’t pay the judgment, the abstract  that has been issued will create a lien on any real estate you own in the counties where it is filed.  If you own real estate that is not exempt from a judgment lien, the lien created by the abstract of judgment can be foreclosed on by the judgment creditor.

If your judgment creditor forecloses on the lien created by the abstract, your non-exempt real estate will be taken and sold with the proceeds being used to pay the judgment.  The foreclosure, however, can only happen against non-exempt real property in Texas.  If the only real estate you own is your homestead, the judgment lien cannot be used to foreclose on that homestead.  In other words, the homestead is not subject to such a forced sale for a civil judgment in Texas.

But, there is reason to be concerned when you have a judgment against you and an abstract of judgment is filed.  Given the fact that a judgment in Texas has a life span of 10 years and can be renewed for an additional 10 years, you face the prospect of having any non-exempt real estate you acquire in the future become subject to the lien created by the abstract of judgment recorded against you.

Harvey L. Cox answers:

From the facts you’ve given it sounds like the loan is totally unrelated to your homestead.  In other words, I understand that the loan was NOT used to buy the homestead.  It could have have been used to do improvements on the homestead but you don’t make that clear in the question.  I’ll answer in such a way that it’s clear in either case.

Texas homestead law absolutely protects your homestead from seizure and sale to pay a general civil money judgment.  So, if the creditor you reference does sue you and does get a judgment against you that creditor can’t take your homestead from you to pay the judgment.  The only exception to that rule is when the creditor either loaned you the money to purchase the homestead or loaned you the money to do improvements on the homestead. If the creditor loaned you the money to purchase the homestead and you are in default of that purchase loan, homestead law would allow that creditor to take your homestead in Texas.  Likewise, if the creditor on whom you’re defaulting loaned you money to do improvements on your homestead and you are defaulting on that home improvement loan the creditor could force a sale of your homestead to pay the defaulted loan.

But, from my understanding of your question the creditor in question loaned you money that has nothing whatsoever to do with your homestead.  In that situation, Texas homestead law absolutely protects your homestead from the creditor’s judgment.

Harvey L. Cox answers:

An abstract of judgment is simply a written summary of a judgment.  It states the amount of money the judgment debtor owes, the amount of interest and the amount due for court costs.  To abstract the judgment means that it’s acknowledged, stamped and recorded among the real property records where the judgment debtor lives and/or owns real property.

If you’re receiving an abstract of a judgment and don’t know anything about it, you likely failed to respond to a lawsuit that was filed against you and the Plaintiff obtained a default judgment against you.

Greatest Concern with an Abstract of Judgment

The biggest concern for you at this time is what a judgment creditor can do with an abstract of a judgment against you.  As I said above, by recording the abstract in all counties where you own real estate your judgment credit is placing a lien on your property.  Unless you real estate is exempt, the lien placed on it by the abstract will allow your judgment creditor to foreclose on the property.  By foreclosing on the property the judgment creditor can force it’s sale and have the proceeds of the sale applied to pay the judgment you owe.

Of course, in Texas the abstract of judgment only attaches a lien to your non-exempt real property.  The biggest exempt real estate holding most people have in Texas is their homestead.  Your homestead is specifically exempted from the lien created by the recording of the abstract.  If, however, you own any real estate other than your homestead that real estate is subject to the lien and can be sold to pay the judgment you owe.

Harvey L. Cox answers:

Abstract of Judgment is Good First Step

Your question is a very broad one.  There are a lot of things you can do to collect your judgment in Texas.  Filing an abstract of judgment is a good first step to collecting.  By filing your abstract you have created a lien on any real estate your judgment debtor owns or that he may acquire at any time after the filing of your abstract. Make sure you file the abstract of judgment in the following counties:

1.  Where you got the judgment.

2.  Where your judgment debtor lives.

3.  Where your judgment debtor works.

4.  Where your judgment debtor’s parents live.

5.  Where the judgment debtor has lived before his current location.

By filing in all of these counties you get very good coverage for any real estate your judgment debtor may own in areas where he lived before you met him.  By filing where his parents live you also cover any potential inherited property.

Abstract of Judgment is not Most Aggressive Technique

You should be aware, however, that an abstract of judgment by itself is not the most aggressive way to collect a judgment.  I outline several more aggressive collection techniques in my book How to Collect Your Own Judgment in Texas. I recommend you get a copy of the book and follow the steps I outline there.

With regards to your judgment debtor’s car, you can seize the car through what is called a Writ of Execution.  You don’t, however, have any type of lien on the car by virtue of your judgment or the abstract of judgment.  If you do attempt a Writ of Execution on the car, you will need to be aware that any lenders on the car who are still owed money will be paid from the sale of the car before you get any of the money from it’s sale.

Avoid the Judgment Lien in the First Place

First things first … if your former landlord does sue you and you dispute the claim, then you definitely need to show up in court and present your dispute.  Depending on how much he claims you owe, you may even considering hiring a lawyer to put on an aggressive defense for you.

The most common mistake I see people make in your situation is not showing up in court.  If you don’t show up your former landlord will get a judgment by default.  The judge will hear only his side and have no alternative but to enter a judgment against you.  That judgment by default can be use to create a judgment lien that will attach to any real estate you own.  So, if you’re really concerned about having a judgment lien you need to make sure you show up for court IF you’re sued.

Homestead is Exempt from Judgment Lien

Now, if we assume your landlord does win (a big assumption if you’re disputing his claim), the next question is whether the judgment he gets can create a judgment lien on your new home.  The answer to that question is a definite no.  The Texas Constitution protects your homestead from a judgment lien arising from the type of lawsuit you may be facing.

As a practical matter, however, the lien created by such a judgment does create a cloud on the title to your home.  But, upon your request to have the lien released and cloud cleared your landlord will have to release the judgment lien as to your homestead.

The issue of having a judgment lien against your home, however, is the least of your worries if you have a judgment entered against you in Texas.  There are other things your landlord could possibly do to collect any judgment he may get against you.  Many of those “other things” are very aggressive and can cause you lots of problems.  But, placing a judgment lien on your homestead is not one of those things that should worry you.

Your question needs to be divided into two separate but related issues.  First is the issue of the judgment against you.  Second is the issue of the judgment lien that attaches to your land.

Abstract of Judgment Creates Judgment Lien

On the issue of the judgment, you need to understand that a judgment in Texas is valid for ten years.  But, it can be renewed for an additional ten years. The judgment lien, however, is created separately and has a life of it’s own.  The judgment lien is created by your judgment creditor recording an abstract of judgment in the real property records of the county where you live or where you own real estate.  Once that abstract is recorded the lien attaches to all of your non-exempt land in the counties where it is recorded.  And, you are correct that you cannot sell the land or borrow against it until your resolve the judgment lien created by the abstract your judgment creditor recorded.

Now, having said what I just did regarding the judgment lien attaching to your land, it does not effectively attach to your homestead.  And, your homestead cannot be taken from you to satisfy the judgment.

For a more detailed explanation of the life of a judgment lien as it relates to the underlying judgment, I refer you to my post Abstract of Judgment – Is There a Statute of Limitations in Texas?

I’m not entirely sure I understand where you are coming up with a seven year statute of limitations.  You may be confusing the time a judgment can remain on your credit report rather than the time during which an abstract of judgment is alive under Texas law.

At any rate, let me see if I can shed some light on issue.

In Texas, the entry of a judgment against you does not, all by itself, create any type of lien against your real property.  To create a judgment lien that attaches to your property, the judgment creditor must have the court clerk issue an abstract of judgment which is this recorded among the real property records of any county in which you own real estate.  That abstract of judgment creates the lien on your real estate.

Abstract of Judgment Has It’s Own Life Span

Now, once an abstract of judgment is created and recorded there are actually two dates that become important to both the judgment creditor and the judgment debtor.  The first is the date of the judgment.  The second is the date of the abstract.  The judgment itself has a ten-year life span.  After ten years it becomes dormant unless it is renewed.  The abstract of judgment, however, has a life of it’s own.  Once the abstract is recorded, the lien it creates continues for ten years from the date of recording.  But, the lien created by the abstract is dependent on the life of the judgment in that the lien expires on the date the judgment becomes dormant if the judgment does so before the ten year life of the abstract expires.

It does get confusing, I know.  But, let’s look at it in light of your situation.  You said the judgment was entered in May 2000.  Since you didn’t give a date, let’s assume you meant on May 1, 2000.  That judgment has a ten-year life so it doesn’t expire until May 1, 2010.  You said the abstract of judgment was recorded in September 2001.  Again, since you didn’t give a specific day let’s assume September 1, 2001.  The lien created by the abstract has a ten-year life of its own so it doesn’t expire until September 1, 2011.

Since the judgment will become dormant on May 1, 2010, the abstract of judgment will also expire on that day because it’s life is dependent on the life of the judgment.  It simply can’t continue until September 1, 2011 without the underlying judgment also continuing.  If, however, your judgment creditor renews the judgment before it expires it will get another ten years of life bumping it’s expiration to May 1, 2020.  In that case, the abstract of judgment will continue for its full life span and not expire until September 1, 2011.  The abstract, however, can also be renewed based on the renewal of the underlying judgment.  Renewing the abstract before its expiration will then extent it’s life until September 1, 2021.  Again, it won’t actually get that full ten years of life because it will expire when the underlying renewed judgment becomes dormant on May 1, 2020.