Liens Against Property in Ohio

Once a creditor obtains a judgment against a debtor, they have the right to collect on what they are owed. However, judgments are now self-enforcing, so the creditor will have to undergo a process of collecting on that judgment. Creditors have several available options to enforce a judgment, including garnishment of the debtor’s wages, placing a lien against the debtor’s property, and the seizure of eligible assets.

It is also important to remember that when a creditor goes through the process of obtaining a lien, the judgment becomes a secured debt, meaning the property may be subject to foreclosure if the debt is not satisfied.

What is a Lien?

A lien is a legal claim on property for the payment of debt. The lien itself is not payment, but it prevents the debtor from collecting profits on the sale of the property until they satisfy their obligations to the creditor. There are many types of liens in Ohio, but the most common is known as a judgment lien.

Judgment liens are attached to a debtor’s real property and will remain in effect for five years. A creditor can obtain a judgment lien by filing a certificate of judgment with the clerk of the court of common pleas in any county where the debtor owns or may own real property in the future. Real property includes land and fixtures on land such as a single-family home or condo.

If the debtor attempts to sell or refinance the real property that is subject to the lien (usually the debtor’s home), the debtor will have to satisfy the lien out of the proceeds before they can pass a clear title to the buyer. A judgment lien may also be enforced through a foreclosure action. Once your judgment has been paid in full, the creditor is required to file a Notice of Satisfaction of Judgment.

Homestead Exemption

Judgment liens are subject to certain exemptions under Ohio law. While exemptions typically play a larger role in bankruptcy proceedings, they are also applicable to execution, garnishment, attachment, or sale to satisfy a judgment or as outlined in O.R.C.§ 2329.66. Ohio’s homestead exemption allows a debtor to exempt up to $132,900 of equity in one parcel or item of real or personal property that is used as a personal residence.

The homestead exemption does not necessarily prevent a creditor from foreclosing on judgment lien against a debtor’s home, but it limits the amount of proceeds that will be subject to the creditor’s claim. Some Ohio courts have declined to allow a foreclosure sale where there will be inadequate proceeds to pay the lien once the homestead exemption is applied.