Find out if a creditor with a judgment against your spouse can place a lien on property you both own jointly.
If a creditor gets a judgment against your spouse (and not you), can it record a lien against real estate that you own jointly with your spouse? State laws vary widely on the extent of a creditor's ability to place liens on real property jointly owned by spouses. Your rights will depend on the laws of your state, and how your state divides marital property and debts between you and your spouse. The three main types of property ownership and debt-sharing schemes are community property, tenancy by the entireties, and common law.
After a creditor gets a judgment against your spouse only, what will happen to your real estate depends on your state and how you own the property:
- The lien could attach to the entire property even if you didn't owe that debt.
- The lien could attach to only your spouse's interest in the property.
- The lien might not attach to the real property at all.
What Happens In Community Property States
If you live in a community property state, you and your spouse legally share almost all property and debts. So, all property you acquire during the marriage (except property you received by gift or inheritance) belongs to both of you, whether the property is titled jointly or separately. This also means that you and your spouse share liability on debts, whether you signed for that debt or were included as a judgment debtor. Consequently, a judgment creditor of your spouse may be able to file a lien against real property that you jointly own with your spouse. That lien could attach to the entire property. If you own real estate that is titled solely in your name, your spouse's judgment creditor may still be able to file a lien on that property.
Currently, community property states and jurisdictions include Alaska (if the spouses signed an agreement to share assets as community property), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Puerto Rico, Texas, Washington, and Wisconsin.
Exceptions to the Community Property Rule
Not all community property states will let a creditor file a lien on joint property where only one spouse is a judgment debtor. That will depend on whether your state's community property laws have carved out an exception to making you liable for your spouse's debts.
Some community property states provide for sharing of property, but not for sharing of debts. For more information on your rights as a spouse in community property states, see Separate and Community Property During Marriage: Who Owns What?
Tenancy by the Entireties States
In states that recognize property ownership in the form of tenancy by the entireties, a judgment lien normally doesn't attach to jointly-owned real property at all. The only exception to this rule is if the creditor also took a judgment against both of you.
Common Law/Separate Property States
In common law property states (for the most part, those states that are not community property states), the debt of each spouse remains a separate liability unless:
- both spouses benefited from the debt, or
- both spouses jointly took out that debt.
Spouses that separate their finances are usually not responsible for the debt of the other. If the spouses jointly share debts and property, then a creditor may reach that property.
If you own real estate jointly with a spouse in a common law property state (and you don't own the property as tenants by the entirety), then a creditor may be able to put a lien on that property, whether or not you were ever individually liable on that debt. However, the lien only attaches to up to one-half of the value of the real property. This represents your spouse's common law interest in the jointly owned property.
In some states, if you weren't individually liable on the debt, the creditor can't garnish the joint account unless the debt was incurred for the benefit of you and the family, or to acquire joint property. For more information on your exposure to debt liability in a common law state, see Spouse Debts in Common Law States.
Protecting Your Property With a Homestead Exemption
Notwithstanding whether you live in a community property or common law state, creditors may be unable to execute on the lien because of a homestead exemption. Homestead exemptions are special rights given to homeowners that protect some or all of the value of the property against liens. To learn more about how the homestead exemption works and to find out how much the exemption is in your state, see The Homestead Exemption in Bankruptcy. The homestead exemption protects your property from creditors in much the same way it protects your property in Chapter 7 bankruptcy.
To learn more on judgment liens, see our article Collect Your Court Judgment With a Real Estate Lien. For information on how creditors enforce judgment liens, and how you can object to a creditor's attempt to execute on a judgment lien, see How Creditors Enforce Judgments.
FAQs
Liens on jointly-owned property
Can creditors come after joint assets? ›
In some common-law states, a creditor can also go after joint property to pay the separate debts of one spouse (even if the debt was not family-related), but in most states, a creditor can take only half of the money in a joint account.
Can a lien be placed on jointly owned property in California? ›
This aspect of a tenancy in common is important to remember as it means that your co-owner could sell his/her interest to anyone. More importantly, your co-owner could cause a lien to be placed against the property or could use his/her share in the property as collateral for a loan.
Can a lien be placed on jointly owned property in Texas? ›
Any debt or obligation your joint owner incurs could affect you. If they file bankruptcy, have a tax lien, or judgment against them, creditors could place a lien on the home.
Can one person take out a loan on a jointly owned property in the US? ›
In addition to sharing the benefits of the property, all of the parties in a joint tenancy share responsibility for the property. For example, one person in the couple can't take out a mortgage loan on the property and leave their partner with the debt.
Are funds in a joint account part of an estate? ›
If there is no surviving party entitled to the money in a joint bank account after the death of all account holders, the funds in the joint account may be considered part of the deceased account holder's estate.
Can a Judgement be taken out of a joint account? ›
Further, if spouses share a joint bank account, the money in the joint account can be garnished to pay a judgment against just one of them. The judgment debtor is presumed to own all of the funds in the joint account.
Can the IRS put a lien on jointly owned property? ›
Even though the IRS's lien does not encumber the innocent party's share of the jointly held property; however, the lien becomes a shared burden since either party may be inhibited from borrowing against or selling the lien property.
Can a creditor take property that is jointly owned in California? ›
Judgment Liens on Joint Tenancy Property
Creditors are entitled to execute against only the divisible interest of a debtor in property jointly owned, not against the entire property. This means that a non-debtor joint tenant is somewhat protected, as a creditor cannot seize their share of the property.
Can a lien be placed on my house for a spouses debt in California? ›
Yes, a lien may be placed on property that is jointly owned. However, the effects of that lien depend on the type of ownership that the property is under. Before discussing the terms of joint ownership, it's important that you understand exactly what liens are and what they may mean for you and your investment.
Can a Lien be Placed on My House for a Spouse's Debt in New York? Yes, a lien can be placed on a jointly owned home in New York, but it is attached only to the debtor-spouse's interest (share) in the property. This, however, isn't as simple as splitting the shares 50-50.
What happens to a jointly owned property if one owner dies in Texas? ›
In Texas, as a joint tenant you will have the right to retain all property rights after the death of one of the owners. To ensure that your jointly owned property is properly protected, it is important to understand how this type of agreement works and what steps must be taken when an owner passes away.
Can a creditor take property that is jointly owned in Florida? ›
Another important piece of information is that a creditor cannot go after property if it is held jointly, or together with another person. You can file an exemption for your interest in the property itself.
Can two people be on title but only one on mortgage? ›
When there are two names on a title deed, it means that there are joint owners of the property and each person owns an equal share of the property. The mortgage does not need to include both names to be valid. Even if the mortgage only lists one spouse, it does not affect the share of the ownership of the property.
Can one person take out a HELOC on a jointly owned property? ›
In many cases, you can apply for a home equity loan or home equity line of credit (HELOC) without your spouse, but you might need their consent. Applying for a home equity loan may be beneficial in certain situations; for example, if you have good credit and your partner has poor credit.
Can someone be on the title but not the loan? ›
Buyers who only want to be listed on the property's title but not the loan are called “title only” buyers. This is often the case with couples where one spouse has credit issues that could affect the loan terms.
Can debt collectors come after a joint account? ›
Yes. When you have a joint account, each account holder is responsible for the full amount of the balance. The credit card company can seek to collect the amount due from either account holder. If you no longer want to be responsible for the joint account, contact your credit card company to learn your options.
Can creditors take money from a joint account after death? ›
Joint Bank Account Rules on Death
"It does not become part of the probate estate." Creditors may attempt to claim funds in a joint account to satisfy debts, but the funds are typically not considered part of the deceased's estate and should not be used to satisfy outstanding debts of the estate.
Can personal creditors go after partnership assets? ›
1. Seizure of the Limited Partnership Interest. A creditor of a limited or general partner cannot seize the limited partnership interest. A judgment creditor of a limited partner can only have the court issue a charging order against the limited partnership interest.
Can a collection agency go after my spouse? ›
A debt collector can contact your spouse. A debt collector can contact your parents or guardian if you are under 18 years old or live with them. A debt collector can also contact your attorney and, if otherwise allowed by law, credit reporting companies (Equifax, Experian, and TransUnion) about your debt.
