Top Connecticut attorney Kevin Casini, Esq. helps us understand the concept of a lien in the guest post below:
Judgment liens are the final step in collecting on a civil judgment. When a court issues a judgment, whether by a judge or verdict by a jury, it doesn't automatically force the debtor to pay. If the debtor doesn't pay, it is the responsibility of the creditor to enforce the judgment. Most enforcement happens when a creditor finds assets belonging to the debtor to be taken to satisfy the judgment. This begins with a judgment lien.
A judgment acts like a metaphorical cloud hovering over the debtor's personal property in the state. A judgment is unenforceable against personal property until it has been attached. The property can include bank accounts, stocks, bonds, vehicles, or other equipment.
Copyrights that are registered with the United States Copyright Office ("USCO") can be liened, through registration at the USCO of the lien. Unregistered copyrights cannot.
There are different types of liens: consensual, statutory, and judicial. Consensual liens include mortgages and car loans, while mechanic's liens and judgment liens are examples of statutory and judicial liens. Once attached, they work similarly to consensual liens, allowing the creditor to seize the property to satisfy a judgment.
Some liens can be discharged too, depending on circumstances.
- Judgment liens: If there is no equity in the property to cover the lien, it may be discharged.
- Nonconsensual liens: Liens placed on the debtor's property without their consent, such as certain tax liens or mechanic's liens, may be eligible for discharge in bankruptcy.
- Voluntary liens: In some cases, voluntary liens (mortgages, car loans), can be discharged through bankruptcy. The notes riding with these can also be written down pursuant to the fair market value ("FMV") of the asset that is taken as collateral.
To establish a lien on real estate, it must be recorded on the land records, but the process varies by state. If a judgment lien is attached to real estate, the judgment continues to accumulate interest at a higher statutory rate (e.g., 17.5% in the state of Connecticut in the United States) than market savings or mortgage rates, and the property's value usually increases over time. The lien is either satisfied through refinance, sale or the property to which it is attached, or by satisfaction.
In some places, the order in which liens are recorded determines their priority. In other cases, certain creditors always have priority, and the government always has priority. The same principles apply to security interests in personal property. The creditor who perfects their security interest first usually has the highest priority. To perfect a judgment lien, it needs to be attached to property.
The way of attachment varies depending on the type of personal property. The way a judgment attaches to personal property is different from how a lien attaches to real estate. Real estate is immovable, and ownership is determined by land records. A judgment lien attaches as soon as it is recorded in the land records. Personal property, however, is movable, and there is usually no central registry for ownership except for automobiles.
Check with an attorney in your state to understand your rights and responsibilities when it comes to judgment liens.
About The Author
About The Author
Kevin Casini Kevin is an attorney and consultant in New Haven where he’s been recognized by New England SuperLawyers™ for his work in civil litigation, copyright, and trademarks, and a music business consultant with his company Ecco Artist Services.
Kevin is VP of Business and Legal Affairs for RME, (www.rme.com) the digital-first, modern rights organization that enables fair and accurate payments for creators and rightsholders.
In practice, Kevin has boasted a talented client roster of award-winning, Grammy nominated, gold and platinum certified artists, writers, producers, & DJs, and he teaches copyrights, music law, and entertainment law at Quinnipiac University School of Law.
He has been speaker, moderator, and panelist at conferences from Austin to Boston, and has advised companies, firms, and governmental agencies on case law, new legislation and proposed legislation, and best practices.
Kevin is a member of the Recording Academy, Copyright Alliance, the Americana Music Association and serves on the advisory board of SONA and on the nominating committee of the Boston Music Awards.
He is a graduate of the Berklee College of Music.