Judgments and Liens
A Judgments and Liens search is an important part of the due diligence process when considering doing business with a person or entity or when purchasing a business. This search will identify if your search subject is a debtor or a creditor in a judgment or lien.
Judgments
A judgment is a court ruling in a civil or small claims case, describing the rights and obligations of both parties in a lawsuit. The judgment will also detail the monetary damages and include how much money the defendant must pay to the plaintiff.
Civil Cases vs. Small Claims Cases
In both instances, the petitioner is seeking a monetary award against a defendant. Civil cases usually arise when a contract has been broken, there is a probate matter or a copyright infringement. A small claims case is a less serious civil case that has been filed at the local, city level. A civil case is a more serious offense which can be filed at any court level, city, county, state or federal.
Liens
A lien is a legal claim against an asset to retain possession or secure payment of a pending debt. A lien refers to an asset which is not physically possessed by the lienor, instead it is only a legal ownership right. Generally, Crimcheck will only search for judgment liens. A judgment lien is imposed on the debtor to secure the payment of a judgment from a civil case.
Consensual vs. Non-Consensual Liens
A lien can either be consensual or non-consensual. Consensual liens use a contract between the creditor and the debtor to ensure payment. Mortgages are considered consensual liens. A non-consensual lien is created under law and gives the creditor the right to impose the lien due to the existing relationship between the creditor and debtor. Non-consensual liens include tax liens, demolition liens, attorney’s liens, mechanic’s liens, judgment liens and maritime liens.
Probate
Probate is the legal process that confirms the validity of a will of a deceased person. The probate court is a specialized court found at the county level that handles all matters of probate and the administration of estates. Crimcheck will search probate courts in the county jurisdictions for any records. Please note, every jurisdiction has different regulations of how they handle intestacy. In the case that a jurisdiction does not have a probate court, all probate roles are filled by a chancery court or other court of equity.
The probate court is responsible for:
- Proper administration of the assets of a deceased person
- Regulates the proceedings of wills, including adjudicating the validity, enforcing the will’s provisions, ensuring proper distribution of all assets and resolving all claims and disputes which may arise
- Issuing marriage licenses
- Adoptions
- Guardianship actions
- Land appropriation cases
Steps of Probate
- The probate case is opened with the court
- The executor records and assembles the decedent’s property
- The executor pays all taxes and debts
- The executor distributes the remaining property or assets to the beneficiaries
How does one become a beneficiary?
A beneficiary is directly named in the will. In the case of intestacy, or where the deceased does not leave a will, the intestacy laws of the jurisdiction must be followed. The court first determines who will receive the property of the deceased then the property will be appropriately disseminated to the proper beneficiaries.
Challenging probate
Any aspect of the probate administration may be challenged including:
- The validity of a will
- The status of an executor
- The identity of the beneficiaries (especially the paternity of heirs)
- The management of the executor
Reasons why property of a deceased person doesn’t go to Probate
There are a few reasons why property would not go to probate. The first reason is that the property was contractually passed on to another. This happens when an insurance policy is owned as “payable on death” by a beneficiary or the property is legally held as “jointly owned with right of survivorship.” Another reason is that the property is held in either a revocable or irrevocable trust which ensures that no court action is involved and the property is privately distributed to the beneficiaries.
Terms to Know
Bankruptcy: A statutory procedure by which a debtor obtains financial relief and undergoes reorganization or liquidation of the debtor’s assets for the benefit of creditors.
Beneficiary: The person which receives the benefits from something, specifically the person who receives assets from a trust, will or life insurance policy
Decedent: The person who has deceased
Encumbrance: Any charge on a property or asset
Executor: Personal representative to a deceased person’s property
Fiduciary Duties: The legal duties of an executor to work in the best interests of the beneficiaries.
Foreclosure: Suit filed by a lien holder or lender against a debtor for refusal or neglect to pay on the loan with the goal of reclaiming the property
Grant of Probate: Document issued by Probate Court which authorizes the executor to administer the property and estate of the deceased.
Intestate: A person who is deceased without a valid will
Judgment: The final determination of the court regarding the rights and obligations of the parties in a case.
Lien: The legal right that a creditor has in another’s property. This lien lasts until the debt is satisfied.
Lienee: The person who benefits from the lien
Lienor: The owner of the property which grants a lien
Malfeasance: Wrongdoing
Tort: Type of civil case including negligence cases and intentional wrongs which result in harm
Will Contest: A challenge to the status and validity of a will
