An abstract of judgment in California is a legal document that is an official summary of a money judgment. A creditor wanting to secure a money judgment with a property lien against a debtor's real property files an abstract of judgment with the assessor-recorder in California counties where the debtor owns property.
Money Judgment Gives Right to Collect Debt
If you go to court because someone owes you money and the judge rules in your favor, you have what is called a money judgment. It gives you the right to collect the debt, but winning a judgment in court in California doesn't necessarily mean that you'll have the money in hand by sunset. Many times people with money judgments have to jump through other legal hoops, like getting a lien, to collect on the debt.
Collecting is simple if the judgment debtor (the person who lost to you in the lawsuit) writes you a check. But sometimes she can't, or she won't, and her only asset is one or more parcels of real property. In that case, you must place a lien on the property to be able to collect the debt when she sells or refinances the property. You place a judgment lien by filling out and filing the California court form called Abstract of Judgment.
Abstract of Judgment is a Court Form
In California, an Abstract of Judgment is a short court form that you can download from any court website or obtain from the court clerk. You fill out the form by entering the requested information identifying the debtor and the lawsuit in which you won the judgment. You also fill in the amount of the judgment. Once the form is completed, the clerk of the court that issued the judgment must sign off on it, certifying it is correct.
Filing the Abstract of Judgment Creates a Lien
The certified abstract of judgment form is legal proof of your money judgment. You can file it with the recorder's office in the county where the debtor owns property. File an abstract of judgment in every county in which the debtor has property. If you have reason to believe she may acquire property in another county, file there as well.
Once you file the abstract of judgment, it becomes a lien on all real property the debtor owns in the county, including property she may later acquire. If the debtor sells or refinances the property, you must be paid before the lien will be released.
Don't Forget Post-Judgment Interest
Judgments accrue interest between the time they're entered and the time they're paid. A judgment in California accrues post-judgment interest at 10 percent per year from the date of the judgment. If the debtor is a state or local governmental entity, interest is only 7 percent a year.
Limited Life of Judgments
An abstract of judgment does not expire; it lasts as long as the judgment lasts which, in California, is 10 years from the date the judgment was entered. After 10 years, you can renew the judgment for a second 10-year period by filing the appropriate forms. If you do not, the judgment will expire, and you will no longer be able to collect on the debt.
When you renew, prepare a new abstract of judgment as well and file it in the appropriate counties, noting the date of the renewal.