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Secured debts and liens

Judicial lien

A judicial lien is a lien that a creditor obtains through a court process, such as a judgment (often called a judgment lien) or a levy, and not through an agreement with the debtor. 1

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How it works

A lien is a charge on property that secures payment of a debt. A security interest is created by an agreement, as with a mortgage or car loan. A statutory lien arises by force of a statute. A judicial lien comes from a judgment, a levy or another legal process, typically after a creditor sues over an unpaid debt and wins. 2 1

A discharge ends personal liability for the debt, but a valid lien that was not avoided in the case remains, and the creditor may enforce it against the property. 3

A debtor may avoid a judicial lien to the extent it impairs an exemption, except one that secures a domestic support obligation. It is not automatic: the debtor files a motion or, in Chapter 13, deals with it in a plan served on the creditor. On the national plan form, that means checking the Part 1 box for avoidance of a judicial lien. 4 5 6

Timing can matter too. The creation of a lien counts as a transfer, and a transfer to a creditor within 90 days before filing can be a preference that the trustee may undo. 2 7

Common questions

Does a discharge remove a judgment lien on my house?

Not by itself. A valid lien that was not avoided in the case remains after it. A debtor may ask the court to avoid a judicial lien to the extent it impairs an exemption. 3 4

What are the three kinds of liens in bankruptcy?

A security interest, created by agreement; a statutory lien, created by a statute; and a judicial lien, obtained through a judgment, levy or other legal process. 1

Is a mortgage a judicial lien?

No. A mortgage is a lien created by an agreement, which the Bankruptcy Code calls a security interest. 1

Related reading

Court judgments in bankruptcyChapter 13 plan formCommon pro se mistakes, and what they costAll bankruptcy terms

Sources

  1. 11 U.S. Code § 101(36) (Cornell LII)
  2. Glossary of Legal Terms (uscourts.gov)
  3. Discharge in Bankruptcy - Bankruptcy Basics (uscourts.gov)
  4. 11 U.S. Code § 522(f)(1) (Cornell LII)
  5. Federal Rule of Bankruptcy Procedure 4003(d) (Cornell LII)
  6. Official Form 113, Chapter 13 Plan (uscourts.gov PDF)
  7. 11 U.S. Code § 547(b) (Cornell LII)

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