What is a Certificate of Judgment in Ohio?
Understanding Judgments and Debt Collection
When you owe money to someone – whether it’s credit card debt, medical bills, or a personal loan – the creditor has a few options to try and collect that debt. They can call or send letters, offer payment plans, or even sell the debt to a third-party collection agency. But if those tactics don’t work, they may decide to take you to court.If a creditor sues you and wins the case, the court will issue a judgment against you for the amount you owe, plus interest and the creditor’s legal fees. This judgment is a court order that says you are legally obligated to pay that debt.But just having a judgment doesn’t automatically mean the creditor will get paid. They still need to take additional legal steps to actually collect on that judgment – and one of the most common methods is obtaining a certificate of judgment.
What is a Certificate of Judgment?
A certificate of judgment is a document issued by the court clerk that certifies a judgment has been entered against you. It contains details like the case number, names of the parties involved, the amount owed, interest rate, and date of the judgment.In Ohio, creditors can use this certificate to place a lien on any real estate you own in that county. This gives them a secured claim against your property that must be paid off if you want to sell or refinance it in the future.The process works like this:
-- The creditor requests a certificate of judgment from the court clerk.
- They take that certificate to the county recorder’s office where you own real estate and have it filed. This officially puts a lien on your property records.
- If you try to sell or take out a new loan on that property later, the title company will find the lien during their title search. You would then need to pay off the full judgment amount to clear the lien before transferring ownership.
So in essence, a certificate of judgment transforms an unsecured debt into a secured debt by giving the creditor a legal claim against your real estate. It’s a powerful tool for creditors to ensure they eventually get repaid.
Judgment Liens Are Temporary (But Can Be Renewed)
In Ohio, judgment liens are not permanent. The lien only lasts for 5 years from the date the certificate of judgment was filed in that county’s property records.However, the creditor can renew the lien for another 5-year period by getting a new certificate of judgment from the court and re-filing it with the county recorder before the initial 5 years is up.There’s no limit to how many times the lien can be renewed this way. As long as the creditor keeps re-filing that certificate every 5 years, the lien remains valid and attached to your property.
Judgments Become “Dormant” After 5 Years
The judgment itself also has an expiration date of sorts in Ohio. If the creditor doesn’t take any enforcement actions for 5 years, the judgment becomes legally “dormant.”This means the creditor can no longer automatically pursue collection efforts like garnishing your wages or bank accounts. The judgment also loses its ability to create a lien against your property during this dormant period.However, the creditor can “revive” or renew the judgment by taking certain legal actions within 10 years after it went dormant. This could include getting a new order of garnishment, issuing another execution against your property, or just filing for a revival of the judgment in court.If the creditor properly revives the judgment within that 10-year window, it becomes enforceable again as if no time had passed. The creditor would then have another 5 years to pursue collections before it becomes dormant once more.
Homestead Exemptions Provide Some Protection
Even if a creditor does get a judgment lien placed on your home, you may still have some protection thanks to Ohio‘s homestead exemption laws.In Ohio, you can exempt up to $132,900 of equity in your primary residence from judgment creditors. So if your home is worth $200,000 and you have a $100,000 mortgage, your $100,000 equity would be fully exempt up to that $132,900 limit.This homestead exemption doesn‘t prevent the lien from being placed on your property. But it does cap the maximum amount the creditor could actually collect from a foreclosure sale of your home.Some courts have even refused to allow a foreclosure at all if the homestead exemption would leave no equity to pay towards the judgment after sale costs and prior mortgage liens.
-Judgment Liens vs. Other Types of Liens
It’s important to understand that judgment liens are different from other types of property liens like mortgages or tax liens.A mortgage lien is voluntary – you agree to it when taking out a loan to buy the home. Tax liens are created when you fall behind on property taxes.But a judgment lien is an involuntary lien imposed by the court as a result of a creditor winning a lawsuit against you. You don‘t have any choice in whether the lien gets attached to your property.Judgment liens also typically get lower priority than mortgages, taxes, and other secured debts if there is a foreclosure or forced sale. The creditor may not get anything if there is not enough equity after paying off the higher-priority liens.
Avoiding a Judgment in the First Place
Of course, the best way to prevent a judgment lien from being filed against your home is to avoid having a judgment entered against you at all.If you‘re sued over an unpaid debt, you have options to fight the case and potentially avoid a judgment altogether. Some common defenses include:
- Lack of proper notification about the lawsuit
- Statute of limitations has expired on the debt
- Insufficient evidence or documentation of the debt
- Case of mistaken identity or identity theft
- The debt was already paid, settled, or discharged in bankruptcy
You’ll need to file a written response with the court disputing the creditor’s claims. If you have a valid defense, the judge may dismiss the case before a judgment is granted.Even if the creditor does get a judgment, you can file post-judgment motions or appeals that could get the judgment overturned or vacated.The key is to take an active role in your defense from the very beginning. Ignoring the lawsuit and failing to respond will almost guarantee the creditor wins by default judgment.
When to Consult an Attorney
Dealing with debt collection lawsuits and judgment liens can be complicated. The laws and procedures vary from state to state, and even county to county in some cases.If a creditor has sued you or is threatening legal action, it’s a good idea to at least consult with a debt defense attorney in your area. An experienced lawyer can review your specific situation and advise you of your rights and best options for fighting the case.Many attorneys offer free initial consultations, so it doesn’t hurt to get a professional opinion before deciding how to proceed. Trying to navigate the legal system alone could end up costing you much more in the long run if a judgment is entered that you can’t afford to pay.
Key Takeaways
To summarize the key points about certificates of judgment in Ohio:
-- It’s a court document certifying a judgment has been entered against you
- Creditors use it to place judgment liens on any real estate you own
- Liens last 5 years but can be renewed repeatedly
- Judgments become legally “dormant” if not enforced within 5 years
- Homestead exemption laws provide some protection for your primary residence
- Avoiding the judgment in the first place is ideal through a legal defense
- Consulting an attorney is advisable when dealing with debt lawsuits
Judgment liens can create major headaches when trying to sell, refinance, or take out a new mortgage on your home down the road. Understanding how they work and your rights as a debtor is crucial to protecting your biggest asset.
FAQs
How much does it cost for a creditor to get a certificate of judgment?
The creditor has to pay a filing fee to the court clerk, which varies by county but is typically $50-100. This fee gets added to the total judgment amount you would owe.
Do all judgments result in liens against the debtor’s property?
No, the creditor has to take the additional step of filing the certificate of judgment with the county recorder‘s office where you own real estate. Just having the judgment itself does not automatically create a lien.
-Can I transfer my home to someone else to avoid a judgment lien?
Possibly, but there are strict rules around fraudulent transfers designed to shield assets from creditors. An experienced attorney would need to review your specific situation.
How long does a judgment stay on my credit report?
Most credit bureaus will keep record of a civil judgment on your credit report for 7 years from the date it was filed, plus 180 days from whenever you satisfied the judgment.
Can I buy a home if I have an outstanding judgment?
It will be very difficult as most mortgage lenders will not approve a home loan if you have unsatisfied civil judgments showing on your credit report. You would likely need to pay or settle those first.