Collection Targets other than the lien foreclosure property.

January 17, 2018

If you are traveling down the lien foreclosure road, you will have obtained a judgment against the party with whom you contracted, whether that is a contractor one tier up or the owner. Either way, that judgment is a personal judgment against the person or entity and allows for collection efforts directly against the person or company.

While a lien foreclosure judgment is a judgment against the real property (which means you can only collect from the proceeds of the sale of that property) the judgment obtained at the lien perfection stage, being a personal judgment, allows different collection options. If the judgment is against an individual, there are the potential options of garnishment of wages or bank account, as well as the seizure and sale of personal property. If the judgment is against a corporation, the assets of the corporation can be seized and sold to satisfy a judgment. If the judgment is against a partnership, the assets of the partnership can be subject to satisfaction of the judgment.

Another thing to remember is that even if you are out of time on filing a materialman lien, you may still have time to file an action based on breach of contract or based on the value of goods and services you provided. A judgment on these claims would be a personal judgment allowing collection efforts directly against the judgment debtor.

There may be instances where financial recovery for your services is dependent on following the lien process to the end, such as when the party for whom you have done the work is insolvent or cannot be found. Whether or not that is the case, the initial lien filing process is not time consuming and preserves your ability to pursue the lien if that is your only option. The point of this post, however, is that your collection options are not necessarily limited to foreclosure of the liened property.