10.08 Judgments

10.08.1

Terminology

  • Judgment

    A judgment is the final determination of the rights of the parties entered by a court of competent jurisdiction. No judgment can be considered final as long as the action is either pending on appeal or the time to appeal from the judgment has not expired.
  • Judgment Creditor

    A judgment creditor is a person in whose favor a judgment against a debtor has been entered, and which judgment remains unsatisfied.
  • Judgment Debtor

    A judgment debtor is a person against whom a judgment has been entered, and which judgment remains unsatisfied.
  • Judgment In Personam

    A judgment in personam is a judgment against the person as distinguished from an action against the thing itself--or an action in rem. A judgment in personam may be termed a general lien. Most judgments are against the person.
  • Judgment In Rem

    A judgment in rem is a judgment against the thing itself, as distinguished from an action against the person. The judgment only binds or affects a particular piece of real estate.
  • Judgment Lien

    A judgment lien is a lien binding the real estate of a judgment debtor, in favor of the holder of the judgment, and giving the latter a right to levy on the land for the satisfaction of the judgment to the exclusion of other adverse interests subsequent to the judgment. A judgment lien in Texas is created by recording an abstract of judgment in the land records.
  • Alternative Judgment

    An alternative judgment is a judgment that by its terms might be satisfied by doing one of several acts at the election of the party or parties against whom the judgment is rendered and from whom performance is required by the judgment.
  • Conditional Judgment

    A conditional judgment is a judgment whose force depends upon the performance of certain acts to be done in the future by one of the parties.
  • Confession of Judgment

    A confession of judgment is a written statement whereby a debtor permits judgment to be entered against the debtor without the necessity of the creditor's bringing legal proceedings against him. In some states, confession of judgment clauses cannot be executed before the party is in default.  Texas does not recognize confessions of judgment.
  • Consent Judgment

    In a consent judgment, the provisions and terms of the judgment are settled and agreed to by the parties to the action.
  • Declaratory Judgment

    A declaratory judgment is a judgment by a court of law in a legal action, declaring the rights and duties of parties under an agreement or their status with respect to each other without ordering anything to be done.
  • Default Judgment

    A default judgment is a judgment in consequence of the nonappearance of the defendant at the appointed time.

    In some jurisdictions, the term is also applied to judgments entered under statutes or rules of court for want of affidavit of defense, plea, answer, and the like, or for failure to take some required step in the cause.
  • Deficiency Judgment

    A deficiency judgment is a personal judgment in a foreclosure action for any remaining balance of an obligation secured by a mortgage, if enough money is not realized to liquidate the mortgage debt under the foreclosure sale.
  • Domestic Judgment

    A judgment is domestic in the courts of the same state or country where it was originally rendered; in other states or countries it is called a foreign judgment. The federal court sitting for the state is a domestic court, and its judgments within the scope of its jurisdiction are domestic judgments.
  • Dormant Judgment

    A dormant judgment is a judgment that has not been satisfied or extinguished by lapse of time, but has so long remained unexecuted that execution cannot now be issued upon it without first reviving the judgment. State laws provide conditions for revival or renewal of dormant judgments.
  • Federal Judgment

    A federal judgment is a judgment rendered in a federal court.
  • Foreign Judgment

    A foreign judgment is a judgment rendered by the courts of a state or country politically and judicially distinct from the jurisdiction where the judgment or its effect is brought in question. A foreign judgment must be domesticated in Texas for an abstract of judgment to be filed against the judgment debtor's property.
  • Interlocutory Judgment

    An interlocutory judgment reserves or leaves an issue, question, or direction for future determination. Interlocutory judgments are entered in the progress of a cause of action and do not determine or complete the suit.
  • Money Judgment

    A money judgment provides for the awarding of money and sets forth the amount of money owed by the debtor to the creditor, as distinguished from a judgment directing an act to be done or property to be restored or transferred.
  • Personal Judgment

    A personal judgment imposes on the defendant a personal liability to pay the judgment, and which may therefore be satisfied out of any of the defendant's property within the reach of process, as distinguished from a judgment that may be satisfied only out of a particular fund or the proceeds of particular property.

 

 

 

 

 

10.08.2

Judgment Liens

The effect of a judgment is that a lien can attach against the debtor's real property upon the entry of the abstract of judgment and automatically binds all the real estate located in the county where the judgment is entered. A lien may be defined as a hold or claim that one person has upon the property of another as security for some debt or charge. It is the right which the creditor has under state law to have the debt satisfied out of the debtor's property. If the creditor merely has a claim, not reduced to judgment, the debtor can sell or mortgage the property, free and clear of the unsecured claim.

A judgment lien is security for the judgment debt. Usually, the lien covers only the personal and real property of the debtor located within the county where the judgment is rendered. A judgment, other than a judgment in rem, binds every freehold interest of the debtor in the county. Abstracts of Judgment must be filed in all counties when the creditor wishes to extend the lien coverage.

A judgment lien is not a title, interest, or estate in land, but is merely a security for the judgment debt against subsequent purchasers and encumbrancers.

In 2007, legislation was passed that addresses the need for title companies to have sufficient information in abstracts of judgment to determine if a party to the transaction is the same party against whom the abstract was filed. A large percentage of AJs do not contain any identifying information. This law requires that all AJs have the last 3 numbers of the judgment debtor's social security number and last 3 numbers of the driver's license number. Partial numbers provide a significant measure of certainty when reviewing AJs while still providing arithmetic certainty against disclosing the full social security and driver's license numbers. Obtaining the numbers from defendants will be done by contempt orders brought by the other party or by the court. Effective September 1, 2007.

Changes/actions required: For AJs filed after 9-1-2007, all not same person affidavits should contain only the last 3 social security number digits and the last 3 digits of the driver's license number.

 

 

10.08.3

Time In Which A Judgment Lien Attaches

The precise time at which a judgment lien attaches to property or becomes operative depends upon the kind of action and the jurisdiction in which the judgment is entered. A judgment attaches from:

  • The date of the recording of the judgment or an abstract of judgment in the public record.

10.08.4

Interests In Land Subject To Judgment Liens

An abstract of judgment becomes a general lien on real property owned by the judgment debtor before and after its perfection.

As a general rule, an abstract of judgment attaches to all the real property of the debtor in the county in which the abstract of judgment is recorded but does not extend to real property situated in other counties of the state unless an abstract of judgment is filed in the properly designated public office of other counties. This rule also applies to judgments entered in other states.

Judgments do not create liens on real property previously conveyed in good faith by deed and recorded before the filing of the abstract of judgment.

When real property is owned by several persons, the undivided interest of each is subject to the lien of a judgment.

The effect of a judgment against any party in any of the following forms or situations of ownership must be considered under the pertinent or appropriate state or case law:

  • Community property.
  • Legal and equitable title in separate persons.
  • Contract vendor.
  • Contract vendee.
  • Reversionary interest.
  • Remainder interest.

 

10.08.5

Priority Of A Judgment Lien

In Texas, judgment liens take priority over subsequent liens, claims, encumbrances, and are subordinate to previous liens, claims, encumbrances, and conveyances found of record.



10.08.6

Duration Of The Lien Period

The duration of a judgment lien in Texas is ten years.  (Twenty years for judgments in favor of the United States of America)  While Texas courts have held that a judgment may become dormant prior to the expiration of the judgment, the Company will not waive a judgment of record as an exception based on the dormancy of the judgment.

In Texas, a dormant judgment can be revived by a suit in scire facias within 2 years after it becomes dormant. The abstract of judgment remains viable only for 10 years. The judgment can be subject to a refilled abstract of judgment for 2 additional years.

Ordinarily, when the extension, renewal, or revival occurs before the expiration of the judgment lien, the judgment lien continues in existence and its validity and priority is preserved. However, when the judgment lien expires prior to the extension, renewal, or revival, jurisdictions are divided as to the effect of the extended, renewal, or revival lien upon liens and encumbrances of record.

In addition to the statutory time termination, a judgment lien may also be terminated through any of the following:

  • The payment or satisfaction of the judgment.
  • The partial release of the property from the lien of the judgment by the judgment creditor.
  • The proper foreclosure of a prior lien.
  • An execution sale and return for the full amount of the judgment.
  • A final order vacation the judgment.
  • The reversal of the judgment in appeal proceedings.
  • By operation of law.

Note: Under the Bankruptcy Code, a judgment lien on real property at the time of the bankruptcy is not affected by the discharge of the debtor (unless otherwise specifically disposed of by an order of the court.)  However, see Sec. 52.042 of the Texas Property Code which provides that discharge of a bankrupt (debtor) under federal law cancels a judgment lien that was against property owned by the bankrupt (debtor) before the bankruptcy was filed.

A judgment in favor of the state or a state agency does not become dormant. A properly filed abstract of the judgment continues to constitute a lien under Section 52.001 until the earlier of the 20th anniversary of the date the abstract is recorded and indexed or the date the judgment is satisfied or the lien is released. The judgment lien may be renewed for one additional 20-year period by filing, before the expiration of the initial 20-year period, a renewed abstract of judgment in the same manner as the original abstract of judgment is filed. The renewed judgment lien relates back to the date the original abstract of judgment was filed.

Changes/actions required: search periods for judgments in favor of the State of Texas or its agencies must now be for a minimum of 20 years and abstractors and examiners should also be on the look out for renewals of such judgments.

 

10.08.7

Enforcement Of A Judgment Lien

Although a judgment is the final determination of the rights of the parties in a judicial action, after its rendition there remains the problem of its enforcement.

Usually, the enforcement of a judgment will produce any of the following results:

  • Payment of a certain sum of money by one party to another.
  • Specific conduct or performance by one party to another.
  • Making a record of the court's determination of the ownership property.

The enforcement of a money judgment is accomplished by the foreclosure of the lien and subsequent execution upon property of the debtor. Its form is wholly statutory.

The enforcement process, subject to specific statutory variations, may be summarized as follows:

  • Rendering of a final nonappealable judgment.
  • Judgment with a direction that execution issue.
  • Request for issuance of execution.
  • Issuance of the execution.
  • Delivery of execution to the sheriff.
  • Delivery of a copy of the order of execution by the sheriff to the judgment debtor and demand of payment.
  • Levy on the debtor's real estate made by the sheriff.  Generally, this is accomplished by the sheriff endorsing the description of the real property on the execution.
  • Filing of a notice of levy with the register of deeds or recorder of deeds of the city or county in which the real estate is situated.
  • Sheriff's execution is returned and filed in court.
  • Publication of notice of sheriff's sale: time, place, and manner of sale.
  • Consummation of sale--report to court--court's approval--redemption period (if any).
  • Execution of sheriff's deed.

Note: Insuring a purchaser at the execution sale of a judgment foreclosure is an EXTRAHAZARDOUS RISK due to the vulnerability of such sales to judicial attack. Specific written approval from a Texas Underwriter is necessary prior to the issuance of any title commitment in favor of such a purchaser.

10.08.8

Federal Judgments

Title 28 U.S.C. Section 1962 provides as follows:

"Every judgment rendered by a district court within a State shall be a lien on the property located in such State in the same manner, to the same extent and under the same conditions as a judgment of a court of general jurisdiction in such State, and shall cease to be a lien in the same manner and time. This section does not apply to judgments entered in favor of the United States. Whenever the law of any State requires a judgment of a State court to be registered, recorded, docketed or indexed, or any other act to be done, in a particular manner, or in a certain office or county or parish before such lien attaches, such requirements shall apply only if the law of such State authorizes the judgment of a court of the United States to be registered, recorded, docketed, indexed or otherwise conformed to rules and requirements relating to judgments of the courts of the State."

An abstract of the federal judgment, good for 20 years, must be recorded in the land records for each county to create a lien on the judgment of debtor's property.

Amended Section 52.001, Property Code, specifies that a judgment lien does not attach and does not constitute a lien against a debtor's exempt real property, such as a homestead residence. This bill also specifies that a judgment lien would only become a lien against the homestead when the property no longer constitutes the debtor's homestead. A judgment debtor may, at any time, file an affidavit in the real property records of the county in which the judgment debtor's homestead is located that substantially complies with Subsection (f). A copy of the affidavit is attached to this bulletin. The AJ lien will not have retroactive effect since the property was homestead and exempt at the time the AJ was recorded. Effective September 1, 2007.

Changes/actions required: When you have satisfactory proof that the property in question is homestead, it is no longer necessary to obtain releases of the Abstract of Judgment for sale or loan transactions. Satisfactory proof would be a homestead affidavit claiming the subject property and disclaiming other property when you have no reason to believe that the affidavit is false. Satisfactory proof would also be the affidavit filed in compliance with this statute. An inspection of the property to determine the homestead status is also allowed.

 

 

10.08.9

Homesteads

Constitutional provisions and statutes on homesteads provide that a judgment is unenforceable against the homestead property of the judgment debtor.

Company policy is to require releases of judgment liens against the homestead property of the debtor. See Tarrant Bank v. Miller, 833 SW2d 666, 1993, for penalties applicable to a judgment creditor who fails to provide a release on a Texas homestead upon request.

10.08.10

Purchase Money Mortgages

Purchase money mortgages take priority over any other prior or subsequent judgment or lien attaching to the property through the mortgagor.


 

10.08.11

Contents of a Judgment Exception

Any judgment exception must include the following:

  • Type of judgment.
  • Title of the court.
  • Number of the action.
  • Name of the judgment creditor.
  • Name of the judgment debtor.
  • Amount of the judgment.
  • Date on which the judgment was entered.
  • The judgment books, minutes, or docket, in which the judgment was entered in the court records.
  • Recording data pertaining to the real estate records.

 

10.08.2.1

Affidavit as Release of Judgment Lien Against Homestead

Effective September 1, 2011, the Texas Legislature adopted a release of lien on homestead property provision.  An abstract of judgment lien does not attach to homestead property.  However, many times holders of the lien are not cooperative in releasing such liens.  This statute allows the homestead owner to provide a copy of an affidavit claiming the property as homestead to the judgment creditor advising  the judgment creditor that the property is homestead.  Unless the judgment creditor files a controverting affidavit within 30 days after receiving the notice, the judgment debtor’s affidavit operates as a release of the abstract of judgment to the specific homestead property. When you have satisfactory proof that the property in question is homestead, it is no longer necessary to obtain releases of the Abstract of Judgment for sale or loan transactions.  Satisfactory proof would be a homestead affidavit claiming the subject property and disclaiming other property when you have no reason to believe that the affidavit is false. Satisfactory proof would also be the affidavit filed in compliance with this statute. An inspection of the property to determine the homestead status is also allowed. Sec. 52.0012.  RELEASE OF RECORD OF LIEN ON HOMESTEAD PROPERTY.  (a)  In this section:(1)  "Homestead" has the meaning assigned by Section 41.002.(2)  "Judgment debtor" and "judgment creditor" have the meanings assigned by Section 31.008(h), Civil Practice and Remedies Code.(b)  A judgment debtor may, at any time, file an affidavit in the real property records of the county in which the judgment debtor's homestead is located that substantially complies with Subsection (f).(c)  Subject to Subsection (d) and except as provided by Subsection (e), an affidavit filed under Subsection (b) serves as a release of record of a judgment lien established under this chapter.(d)  A bona fide purchaser or a mortgagee for value or a successor or assign of a bona fide purchaser or mortgagee for value may rely conclusively on an affidavit filed under Subsection (b) if included with the affidavit is evidence that:(1)  the judgment debtor sent a letter and a copy of the affidavit, without attachments and before execution of the affidavit, notifying the judgment creditor of the affidavit and the judgment debtor's intent to file the affidavit; and(2)  the letter and the affidavit were sent by registered or certified mail, return receipt requested, 30 or more days before the affidavit was filed to:(A)  the judgment creditor's last known address;(B)  the address appearing in the judgment creditor's pleadings in the action in which the judgment was rendered or another court record, if that address is different from the judgment creditor's last known address;(C)  the address of the judgment creditor's last known attorney as shown in those pleadings or another court record; and(D)  the address of the judgment creditor's last known attorney as shown in the records of the State Bar of Texas, if that address is different from the address of the attorney as shown in those pleadings or another court record.(e)  An affidavit filed under Subsection (b) does not serve as release of record of a judgment lien established under this chapter with respect to a purchaser or mortgagee of real property that acquires the purchaser's or mortgagee's interest from the judgment debtor after the judgment creditor files a contradicting affidavit in the real property records of the county in which the real property is located asserting that:(1)  the affidavit filed by the judgment debtor under Subsection (b) is untrue; or(2)  another reason exists as to why the judgment lien attaches to the judgment debtor's property.(f)  An affidavit filed under Subsection (b) must be in substantially the following form:HOMESTEAD AFFIDAVIT AS RELEASE OF JUDGMENT LIEN

 
Before me, the undersigned authority, on this day personally appeared __________ ("Affiant(s)") (insert name of one or more affiants) who, being first duly sworn, upon oath states:(1)  My/our name is/are __________ (insert name of Affiant(s)).  I/we own the following described land ("Land"):(describe the property claimed as homestead)
 
(2)  This affidavit is made for the purpose of effecting a release of that judgment lien recorded in __________ (refer to recording information of judgment lien) ("Judgment Lien") as to the Land.(3)  The Land includes as its purpose use for a home for Affiant(s) and is the homestead of Affiant(s), as homestead is defined in Section 41.002, Property Code.  The Land does not exceed:(A)  10 acres of land, if used for the purposes of an urban home or as both an urban home and a place to exercise a calling or business; or(B)  200 acres for a family or 100 acres for a single, adult person not otherwise entitled to a homestead, if used for the purposes of a rural home.(4)  Attached to this affidavit is evidence that:(A)  Affiant(s) sent a letter and a copy of this affidavit, without attachments and before execution of the affidavit, notifying the judgment creditor in the Judgment Lien of this affidavit and the Affiant(s)' intent to file for record this affidavit; and(B)  the letter and this affidavit were sent by registered or certified mail, return receipt requested, 30 or more days before this affidavit was filed to:(i)  the judgment creditor's last known address;(ii)  the address appearing in the judgment creditor's pleadings in the action in which the judgment was rendered or another court record, if that address is different from the judgment creditor's last known address;(iii)  the address of the judgment creditor's last known attorney as shown in those pleadings or another court record; and(iv)  the address of the judgment creditor's last known attorney as shown in the records of the State Bar of Texas, if that address is different from the address of the attorney as shown in those pleadings or another court record.(5)  This affidavit serves as a release of the Judgment Lien as to the Land in accordance with Section 52.0012, Property Code.Signed on this _____ day of __________, _____.________________________________________(Signature of Affiant(s))State of __________County of __________SWORN TO AND SUBSCRIBED before me on the _________ day of __________, 20___.My commission expires:_____________________________________________________Notary Public, State of TexasNotary's printed name:________________________________