Abstract of Judgment
An abstract of judgment is a document created by a court that shows detailed information about a judgment rendered in court. The abstract of judgment lists the date of the judgment and the amount, as well as contact information for both the debtor and the creditor. Also included in the abstract of judgment is the rate of interest that the debtor is expected to pay the creditor, any unpaid court costs, and specific instructions that the debtor is expected to follow in order to comply with the judgment. To explore this concept, consider the following abstract of judgment definition.
Definition of Abstract of Judgment
- A copy or summary of a judgment rendered by a court.
What is an Abstract of Judgment
The term “abstract of judgment” may be used generically to describe the summary of a court case. However, in the technical sense, the term is defined as a document that is produced upon the conclusion of a court case that describes the judgment that was rendered in that case.
The term “abstract of judgment” has different meanings, depending on the type of case for which it is created. For example, an abstract of judgment in a criminal case may be useful in proving the defendant’s prior conviction. However, in property law, some states use an abstract of judgment as a lien on a debtor’s property. The lien can only be lifted upon the debt being fully paid.
In the case of a real estate judgment, if the debtor (the party who owes the debt) does not pay as agreed, the creditor (the party to whom the debt is owed) can force a sheriff’s sale of the property in order to collect on the judgment. A sheriff’s sale is another term for a government auction, which is a public auction that the government holds upon seizing someone’s property for non-payment of the debt that is owed.
However, a sheriff’s sale may not be the easiest solution to enforce. First, the party who is owed the payment needs to find the county wherein the property is located in order to sell it. Then, even if the property is located, there may be other judgments that are of a higher priority, and which must be paid before the creditor can collect on the lien. This may include such things as back taxes. There is also the possibility that the debtor can claim bankruptcy in order to avoid paying the judgment at all.
Effect of an Abstract of Judgment
When a judgment is entered against a person, the abstract of judgment appears on public records as a lien or claim against his or her real property. This effect of an abstract of judgment serves to notify anyone who might want to buy the property, or to file their own lien against it, that someone already has a claim secured by the property. This affects the person’s ability to sell the property, as well as its value for the purposes of obtaining a loan. Additionally, if the property owner fails to pay the amount of the judgment, the lienholder can force the sale of the property in order to obtain his money.
Writ of Garnishment
Another effect of an abstract of judgment might be the issuance of a writ of garnishment. For example, an abstract of judgment, once filed, authorizes the creditor to file a writ of garnishment, which allows the creditor to collect the money owed to him by the judgment from a party who does not own any real estate on which a lien can be placed.
In one of these situations, since the debtor does not own any property, the creditor can demand that the debtor’s bank account be garnished until the judgment is fully satisfied. When someone’s bank account is garnished, the bank is given formal instructions from the court to take a set amount of money from the debtor’s account in either weekly or monthly installments, and transfer it to the creditor until the amount of the judgment has been paid in full.
Writ of Execution
Another effect of an abstract of judgment might be the issuance of a writ of execution. A writ of execution is an order directing that the debtor’s personal property be sold in order to pay off the judgment. Again, this might be used in a case where the debtor does not own any real property that could satisfy the judgment. However, if the debtor is a business, rather than an individual, the property belonging to the business may be “exempt.” This means that the business’ property may be prohibited from being sold for the purposes of satisfying the judgment.
A writ of execution is delivered to the debtor by a sheriff, and it allows the sheriff to confiscate the debtor’s property to be auctioned in order to pay the judgment. In most jurisdictions, the debtor may file a motion to exempt certain property with the court. If granted, certain items may be protected from seizure and auction. In addition, a debtor may be able to get an extension of time in which to gather the money, depending on whether or not the sheriff is willing to grant it.
A third effect of an abstract of judgment might be the issuance of a turn-over order. A turn-over order is for the debtor to transfer certain property to the creditor in order to satisfy the judgment. The creditor can then do what he wishes with the property, which more than likely will result in its sale.
The turnover order is not an immediate solution to the problem. Often, a restraining order must also be sought to prevent the debtor from secreting away or wasting an asset that could otherwise be sold to make good on his debt. A writ of garnishment is often coupled with a turnover order as well.
The trial court has discretion over whether or not to grant a turnover order, once a judgment has been rendered. If such an order is granted, there is no need for another hearing. The debtor is simply put on notice that the turnover order has been issued, and that he is required by law to turn over his property to settle his debt.
Release of an Abstract of Judgment
Depending on the state wherein the abstract of judgment is issued, there may be different rules regarding the release of an abstract of judgment. However, the only way a judgment lien can be released is through a document called a “Release of Abstract of Judgment,” or “Satisfaction of Judgment.” A Satisfaction of Judgment is a document filed with the court, showing that the judgment has been paid in full, and the lien released by the court.
Once the judgment has been paid, the creditor must file a document with the court within a specific number of days, though the time limit varies by jurisdiction. A Release of Abstract of Judgment must be filed by the creditor to the judgment, once the debt has been paid. Should the creditor fail or refuse to file the document, the debtor may take the matter to the court to have the Release of Abstract of Judgment filed.
A Transcript of Judgment is like an abstract of judgment in that it contains all of the necessary information relevant to the judgment. However, the Transcript of Judgment is filed only in cases where the creditor wants to enforce the judgment against the debtor’s real property. The Transcript of Judgment is also certified by the court clerk in the county in which it is entered. Once the Satisfaction of Judgment, or Release of Abstract of Judgment, has been filed, the creditor must forward a certified copy of the document to the debtor.
Abstract of Judgment Example in a Divorce Case
An example of an abstract of judgment being escalated to a Supreme Court involved a case that began in 1965, while Donald and Carmel Vallentyne were still married. Donald was being sued by Nadine and Rodney Kinney for damages on certain personal torts. While that action was pending, Carmel decided to divorce Donald.
On September 5, 1967, Carmel was granted an interlocutory divorce decree. Later that month, the Kinneys were awarded a judgment of damages against Donald, obtaining an Abstract of Judgment. With this document, the Kinneys filed a lien against the Vallentyne’s real property. Donald and Carmel had jointly owned three real estate properties when the Kinneys filed their abstract of judgment. However, when the final decree of divorce was entered in September of 1968, Carmel was awarded all three properties by the Court.
In 1970, the Kinneys, after trying and failing to forcing Donald to pay the judgment amount in full by selling off his personal assets, they filed another action – this time against both Carmel and Donald. Here, the Kinneys tried to go after Carmel’s real estate, and asked the court to allow them to place a judgment lien against her property. The court ruled that the Kinneys could go after Carmel’s property, but only in an amount equal to the value of the property at the time the interlocutory divorce decree was granted.
The Kinneys appealed the decision, and the Court of Appeals held that the joint properties were fair game insofar as satisfying Donald’s judgment debt, and that the divorce court did not give that property over to Carmel until the final divorce decree. Further, the Court of Appeals ruled that when the abstract of judgment was recorded, the three properties were still jointly owned. Therefore, when Carmel took over the titles as her separate property, they were still “subject to the judgment lien” that was placed on them previously.
The case was then escalated to the Supreme Court of California. The Court ruled that the trial court should be reversed, but not to Carmel’s benefit. Instead, the Court held that, because the three properties were jointly owned by Donald and Carmel when the abstract of judgment was filed, the Kinneys were entitled to enforce their judgment lien to the fullest extent of the law. Further, the Kinneys were permitted to seek an amount equal to the current value of the properties, rather than their value at the time the interlocutory divorce decree was granted, in order to fully satisfy Donald’s damage judgment.
Related Legal Terms and Issues
- Defendant – A party against whom a lawsuit has been filed in civil court, or who has been accused of, or charged with, a crime or offense.
- Interlocutory Order – An order that is issued temporarily before the completion of a legal action.
- Lien – An encumbrance placed on a person’s property to secure a debt the property owner owes to another person or entity.
- Tort – An intentional or negligent act, a civil wrong, as opposed to a criminal act, which causes harm to another.