When evaluating the marketability of title in a real estate transaction, one of the most critical concerns is the presence of recorded judgments. Among these, an Abstract of Judgment is a particularly impactful document. While often overlooked by buyers and even some professionals, its presence in the public record can cloud title, disrupt closings, and cause significant delays unless addressed properly.
What Is an Abstract of Judgment?
An Abstract of Judgment is a summary of a court’s final ruling that establishes a money judgment against a debtor. Once the judgment is rendered—often by a civil court—it can be recorded in the county land records. This action creates a judgment lien that attaches to any real property owned by the debtor in that county, effectively securing the creditor's claim.
The abstract typically includes:
- Name of the debtor (judgment defendant)
- Name of the creditor (judgment plaintiff)
- Case number and court jurisdiction
- Amount of the judgment, including interest and fees
- Date of judgment entry and date of recording in land records
By recording this summary, the creditor ensures that the judgment becomes a lien against the debtor’s real estate in the county of recordation. In states like Illinois, this process provides constructive notice to all future buyers and lenders of the judgment's existence.
How Does an Abstract of Judgment Affect Title?
1. Creates a Cloud on Title - Once recorded, the judgment becomes an involuntary lien on any real property owned by the debtor in that jurisdiction. This “cloud” makes the title unmarketable—meaning it cannot be sold or refinanced without first resolving the lien.
2. Impacts Refinancing and Sales - Lenders will not issue new loans if there is a superior lien that could challenge their mortgage priority. Similarly, buyers generally will not close on a property with unresolved title defects. The abstract of judgment must either be:
- Paid off and released
- Bonded around or subordinated, depending on the jurisdiction
- Expired, based on statutory lien periods (e.g., seven years in some states)
3. May Attach to After-Acquired Property - In some jurisdictions, if a judgment debtor later acquires property in a county where a judgment has already been recorded, the lien can attach to the newly acquired property automatically.
4. Survives Bankruptcy (Sometimes) - While many debts can be discharged in bankruptcy, the lien created by an abstract of judgment may survive if not explicitly avoided in the bankruptcy proceeding. A bankruptcy discharge removes personal liability but doesn’t necessarily clear the lien from the real estate.
How to Address an Abstract of Judgment in Title
When an abstract of judgment appears on title during a search or examination, a title company or real estate attorney will typically:
- Confirm Identity: Ensure the debtor listed in the abstract is the same individual who owns the property. If not, an affidavit of identity or non-identity may be sufficient to remove it from the commitment.
- Obtain a Payoff: Contact the creditor or their attorney for a payoff letter showing the current balance, including interest.
- Secure a Release: After payment, a release or satisfaction must be recorded to clear the lien.
- Evaluate Statute of Limitations: In some cases, if the lien has expired under state law and hasn’t been renewed, the title company may be able to ignore it.
- Underwrite Around It: If payment is not feasible prior to closing, some title insurers may allow for bonding or indemnification.
An abstract of judgment is more than just a bureaucratic document, it represents a legally enforceable claim that can bind real property for years. For buyers, sellers, and investors, its presence on title must be taken seriously. At Abstract Authority, our experienced title research team flags these liens early, confirms identity matches, and works with your legal team or title underwriter to clear them.