Limitations of the Texas Judgment Lien

The Texas judgment lien is a powerful tool in the judgment collection process. Its power lies in its ability to attach your judgment debt to the debtor’s real property. But, there are limitations to that power.

It Only Attaches to Some Real Estate

A Texas judgment lien only attaches to real estate your debtor owns. It has no effect on the debtor’s personal property.

Now suppose your debtor does own a home in Texas. Your would, of course, assume that your lien attaches to that home. But, it doesn’t. Texas exempts your debtor’s personal residence from the power of a judgment lien. It’s called a “homestead exemption.”

Even though your lien doesn’t attach to the debtor’s homestead, it does create a cloud on the debtor’s title to his home. In other words, you can make it difficult for the debtor to sell his home because your lien creates a question of ownership.

Because of this “cloud” you must release the lien as to the homestead. You don’t have to do it until the debtor asks you to do so. But, if the debtor asks, you have to release it. If you don’t, the debtor can sue you for damages.

It Attaches to Later Acquired Real Estate

Your judgment lien isn’t limited to real estate the debtor owns on the date you create the it. It also applies to any non-homestead real property he acquires at any time after you obtain a judgment. So, if your judgment debtor buys a rent house after you create obtain a judgment, your lien does attach to that rent house.

It Attaches to Inherited Property

When a person dies in Texas, his property immediately becomes the property of his heirs. But, the property is first subject to payment of the debts of the deceased. This is true whether the person dies with or without a will.

If you have a judgment against one of the heirs, it immediately attaches to the inherited property. An executor of the deceased person’s estate can, however, sell the property free of your lien. But, he can only do so to pay debts of the deceased.

The Texas Judgment Lien is a powerful collection tool. But, it does have limitation. Being aware of both its power and its limitations will help you make the best use of this tool in your collection efforts.