subject: The Texas Judgment Lien Does Not Have Absolute Power [print this page] The force 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 wishes to sell that property, your associated interest forces him to pay you from the profits of the sale. It is only after you get paid off that you deliver a release of your interest in the land. That makes the judgment lien an incredibly effective tool.
Even more impressive is the fact that the lien attaches to every real property asset your debtor acquires or inherits even after you have perfected it.
After Acquired Property
That's correct. Your secured interest is actually not restricted to real estate the debtor owns on the date you create the lien. It also applies to any non-exempt real property he receives any time afterwards. Therefore, if he buys a rental property after you secure your interest, your interest attaches to that lease property.
Inherited Land
When a person dies in Texas, his assets immediately pass to and become the property of his heirs. But, those possessions are first subject to payment of the debts of the deceased. This is generally true whether the person expires with or without a will.
Supposing that you have an award of money damages against one of the beneficiaries, it instantly attaches to the inherited land. Of course, the administrator of the estate can easily sell the land free from your interest. Nevertheless, he may only do so to pay liabilities of the estate. If the estate has no liabilities, your lien stays attached to the real estate acquired by the debtor.
Texas Exemptions and Limitations
Even though the power of a judicial lien in Texas looks really good from a creditor's perspective, you must understand that there are actually still several restrictions in place. The first limitation is that it does not attach to all property of the judgment debtor. It is restricted to only real estate. It has zero effect on the personal property of your debtor. And, even the consequence on real estate has limitations. Let me illustrate.
Suppose your defendant owns a residence in Texas. You would assume, obviously, that your interest fastens to that home. On the other hand, a judgment lien in Texas does not attach 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 no effect on your defendant's home.
Now, it is necessary to make somewhat of a technical distinction here. Officially, your lien does not fasten to the home. However, the fact of your professed interest does establish a cloud on the title to the home. In other words, the very fact that you have an abstract of judgment on record will likely make it hard for your defendant to sell his home because your lien establishes a question of ownership. Legally, it is called a "cloud" on the title.
Due to this "cloud," you will inevitably need to deliver the defendant a release as to his residence. You do not need to do it until the debtor asks you for it. But, if the debtor does demand a release, you are under a duty to furnish it to him. You should talk with a lawyer to draft the release for you so that it is very carefully worded to just release 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 a powerful collection tool. Its power is evident in its ability to attach to both the existing and after acquired real estate holdings of your judgment debtor. Nevertheless, its power is not absolute because Texas does exempt the homestead from the interest created by any civil order for payment of money that is not directly linked with the purchase price of the homestead itself.
