When is a creditor allowed to place a lien on your property?
After a creditor sues you and wins a judgment in court, the judgment can become a lien on all real estate owned by the debtor. Law Division judgments for money damages are a lien against any real estate owned by the defendant in the State of New Jersey. N.J.S.A. 2A:16-1. The initial duration of the lien is 20 years, but may be renewed for additional periods of 20 years. However, to create a lien, the judgment must be properly docketed with the Clerk of Superior Court in Trenton.
Types of Property Liens in the State of NJ
Not every creditor is allowed to place a lien on your property. Below we have outlined instances where liens may be placed on real estate and personal property. This is what is known as a Judgement Lien.
Other Types of Liens
Various creditors have the right to place a lien on your real estate or property without filing a lawsuit in a court of law. Below is information on other common types of property liens in NJ.
Property Tax Liens
If you do not pay your property taxes, often times the lender will pay them on your behalf and add that sum to your mortgage debt. This is done in an effort to protect its mortgage. Once a property tax lien is in place, the government can step in and have the property sold in an effort to pay those taxes. The government must follow the procedures and laws outlined by the State of New Jersey during this process. You may have an opportunity to pay the outstanding tax debt and take control of the property.
If you do not pay back taxes after being notified by the IRS it may be entitled to place a lien on your personal property. This is especially true in instances where it is difficult to attach this to wages (small business owners, unemployed workers, self-employed). Many times with creditors, they are happy to wait until the sale of property to take payment on debt. The IRS does not like to wait and may be inclined to force a sale if the amount owed is substantial.
Child Support Liens
If you fall behind or fail to pay child support or alimony, your former spouse or the recipient may be entitled to file a lien against your property. The lien can stay in place until you pay the outstanding debt, the recipient forces a sale or you refinance the property.
Mechanic’s & Construction Liens
When a contractor or builder does work on your home or property and you fail to pay, they may be entitled to file what is know as a mechanic or contractor lien. Click here to learn about construction liens in NJ in more depth.