How Does the Judgement Clearing Process Work?
A judgement on a piece of property is an intimidating roadblock for many real estate sellers and buyers. Here, the real estate professionals at Powerhouse Title Group explain what a judgement is, and how it can be removed from a piece of property.
What is a Judgement?
In Maryland, debts must be paid in a timely manner. If you owe a debt to a creditor, they have three years from the time the loan was offered to take you to court for failure to repay the debt as per the stipulations of the agreement. A court order to pay a debt is known as a judgement. This judgement is legally enforceable for 12 years, after which a creditor can either renew the judgement, or let it lapse. A judgement ensures that a creditor will be paid back on the loan they initially provided.
How Will a Judgement Affect a Piece of Property?
A judgement lien can be attached to any real estate in possession of the debtor in Maryland—this could be a condo, home, piece of land, commercial property or any other property. In Maryland, a judgement lien cannot be attached to personal property, such as jewelry, fine art, family heirlooms or other valuables.
How Can a Judgement Be Cleared?
To be cleared, the debt a judgement is based on must be paid, or the judgement must be declared invalid through legal means. If the debtor is unable to pay the judgement lien, they may be able to negotiate with the creditor, and develop a structured payment plan, or reduce the amount of the judgement entirely.
The debtor may also file bankruptcy, which may allow them to forego paying the judgement lien. If the property is the owner’s primary residence, they are allowed to exempt up to $23,675 of home equity from being collected to satisfy the debt—if the judgement lien would consume most or all of the exempted equity, the judgement may be voided. However, there is another aspect that must be met before this can happen: the judgement must have been issued against you; it cannot have been agreed to as part of a settlement. If the judgement was agreed upon, it has been “acknowledged” by the debtor, and therefore cannot be declared invalid.
Once the judgement is cleared, it is called a “satisfaction of judgement,” and a form notifying the court must be filed with the court clerk. This form must be signed by the judgement creditor, as well as the debtor, to be considered valid.
Why You Need Powerhouse Title Group
Powerhouse Title Group has over 40 years of experience dealing with judgements and judgement clearance. It can be a process fraught with legal difficulty, but there is no reason to navigate it alone. At Powerhouse, our dedicated experts will walk you through the process step-by-step, and ensure all transactions move smoothly and quickly. For more information, we urge you to contact us today!