Personal lien against a person

Atlanta, Georgia
Mortgage Brokers & Lenders
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Personal lien against a person

Jeremy AnanPro Member
Rental Property Investor · MD · Member since 2017 · 102 posts · 21 votes

Hello BP - 

I have a friend who's considering real estate investment but has a lingering concern. Back in 2007-2008, he took a business loan of $100,000 for a restaurant venture that unfortunately failed. As a result, the bank placed a lien on his personal name, which remains active and tied up in court. Surprisingly, this lien doesn't appear on his credit report. He didn't file for bankruptcy.

Now, he's contemplating investing in real estate but worries about how this existing lien might impact his chances of securing a loan for such investments.

Could anyone shed light on how this historical lien, even though not visible on credit reports, might affect his eligibility for real estate investment loans? What steps could he take to improve his prospects or navigate this issue effectively?

Any insights or experiences shared would be immensely appreciated. 

Best regards,

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Sam Bagwell
Attorney · Gainesville, GA · Member since 2015 · 106 posts · 87 votes
2y

I agree with @Tom Gimer ; check 7 + 3 years in Georgia.  If the lien/judgment is still "live" then it will automatically attach to any real property he acquires.  A lender would likely not agree to be in second position, and so would be unwilling to lend unless/until it is cleared.  I am a real estate litigation attorney in Georgia.  I'm not your attorney.

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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    2y

    @Jeremy AnanYour friend needs to pull the docket in his case and figure out when judgment was entered and what transpired since. If the judgment was not renewed before the 12 year limitations period ran, it has expired. Credit is clear due to the age of the issue but the important thing is whether that judgment lien could still attach to property he acquires.

    Go here, find the case and hope: https://casesearch.courts.state.md.us/casesearch/

    If it expired he's free and clear. If it was renewed he needs some advice outside of this forum. Good luck to him.

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  • Jeremy AnanPro Member
    OP
    Rental Property Investor · MD · Member since 2017 · 102 posts · 21 votes
    2y

    Thanks @Tom Gimer, my friend resides in Atlanta, GA. I will absolutely share this info with him.

    1Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    2y

    @Jeremy Anan I didn't catch that part. GA is 7 years if not renewed (+3 to revive). Same process though... debtor needs to review the court records and figure out what, if anything, the creditor has done to preserve the judgment. https://law.justia.com/codes/georgia/2022/title-9/chapter-12...

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  • Sam Bagwell
    Attorney · Gainesville, GA · Member since 2015 · 106 posts · 87 votes
    2y

    I agree with @Tom Gimer ; check 7 + 3 years in Georgia.  If the lien/judgment is still "live" then it will automatically attach to any real property he acquires.  A lender would likely not agree to be in second position, and so would be unwilling to lend unless/until it is cleared.  I am a real estate litigation attorney in Georgia.  I'm not your attorney.

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  • Wyatt WolffPro Member
    Lender · Charlotte, NC · Member since 2019 · 467 posts · 279 votes
    2y

    Learn something new every day. Good info fellas! 

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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    2y

    @Sam Bagwell Interesting. Up here where I am located a prior judgment lien would attach behind a purchase money mortgage... so the lien would need to be disclosed to the lender as a subordinate matter. Of course a surprise $100k subordinate lien would kill many deals.

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  • Sam Bagwell
    Attorney · Gainesville, GA · Member since 2015 · 106 posts · 87 votes
    2y
    Quote from @Tom Gimer:

    @Sam Bagwell Interesting. Up here where I am located a prior judgment lien would attach behind a purchase money mortgage... so the lien would need to be disclosed to the lender as a subordinate matter. Of course a surprise $100k subordinate lien would kill many deals.


    Georgia is a special animal, and it gets even more niche-y, in that the judgment lien, though having priority, only has priority in the county where it is recorded, even though it is eligible for recording in all counties, so if they plaintiff's lawyer doesn't file statewide, the debtors property in other counties remains unencumbered.

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  • Jeremy AnanPro Member
    OP
    Rental Property Investor · MD · Member since 2017 · 102 posts · 21 votes
    2y

    @Sam Bagwell Thank you so much. Good stuff.

    1Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    2y

    @Sam Bagwell That's how it works in most states I cover. As a creditor you need to record the judgment (foreign or domestic) in every county where the debtor owns property to perfect the lien. And the SOL is based upon local law, not the law where the judgment was originally entered.

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