Definition of "Abstract of judgment"

Oscar Velez real estate agent

Written by

Oscar Velezelite badge icon

John R. Wood Properties

The abstract of judgment definition is best explained as a written summary of the judgment passed by a court. This abstract of judgment includes the amount of money the losing party of a lawsuit owes to the winning party, the interest rate on that amount, the court costs, as well as any other orders that have to be obeyed by the losing party. Both sides acknowledge the abstract of judgment. It is then stamped and recorded officially with the chosen government.

The clerk court is the one responsible for preparing the abstract of judgment. The government where the abstract of judgment is recorded, however, is also important as it’s usually recorded in the property records of the county where it is believed that the debtor owns or has an interest in real estate property.

Abstract of Judgement and Real Estate Property?

Upon losing a lawsuit, a judgment is ordered on the losing party, and the abstract of judgment is made. The losing party of a lawsuit or the judgment debtor must adhere to this abstract of judgment by paying what they owe to the judgment creditor or lawsuit winner. As mentioned above, this abstract of judgment is recorded in the county’s property records.

But why is it recorded there? It’s simple. The creditor is entitled to force the sale of any property the debtor owns so that they can compensate for the judgment’s amount if the judgment is not paid by the debtor does not pay.

The abstract of judgment also prohibits the transfer of property. In case the judgment debtor does not pay the judgment, then the abstract of judgment is used as a judgment lien on real estate property owned by the debtor. This judgment lien prevents the owner from transferring the property until they pay the judgment. The abstract of judgment also allows the judgment creditor to force-sell the property to collect, as mentioned above.

Obstacles of Abstract of Judgments?

There are a few instances where the abstract of judgment can not go into effect. The following situations can hinder the judgment creditor from enforcing the judgment’s payment:

  • It can not always be easy to find the county where the judgment’s debtor owns real estate property and, by extension, the abstract of judgment can not record in the correct county so that it can enforce the payment.
  • Any secured loans, mortgages, tax liens come before the judgment lien and will make it impossible to enforce the judgment’s payment if any other debts or payments need to be completed first.
  • If the debtor goes bankrupt, any method of paying the judgment is made impossible.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

A proposal to buy property at a specified price. The seller of the property has the options of accepting the offer, rejecting it, or making a counteroffer. For example, John signs a listing ...

Factor employed by real estate agents or appraisers to determine the change needed in operating income to obtain a desired rate of return. It is used to evaluate income-producing property. ...

Reduction of part of the balance of property by charging an expense or loss account. The reason for a write-down is that some economic event has occurred indicating that the asset's value ...

Descriptive of the architectural development of property in a certain area. For example, a housing subdivision may use very similar building architecture throughout the development. All the ...

Principle stating that the joint tenants must have equal rights to possession of the whole property. ...

Landlord's right to receive the value of the tenant's property to pay for unpaid rents or for damages to the leased premises. ...

The definition for the gross living area published by the Appraisal Institute’s Dictionary of Real Estate 4th Edition is: “The total area of finished, above-grade residential ...

Characteristic of a trust that prevents the invasion of its principal by the trustees while providing a lifetime income to its principal beneficiary with the rest going to the son's ...

Under a FHA-insured mortgage, both the property and the borrower must meet certain minimum standards. The borrower is charged an insurance fee of one-half percent on the unpaid balance and ...

Popular Real Estate Questions