A Judgment Has Been Entered Against Me. Is My House Safe From Judgment Creditors?

December 21, 2022
Benjamin A. Gingrich

For most people, it can be very scary when a lawsuit is filed against them. When someone finds out they are being sued, they may not know exactly what that means or what will happen if a judgment is entered against them, especially one directing them to pay money.

One of the first questions that might pop into their mind is whether the person or business that filed a suit against them (legally known as the “plaintiff”) can take their house if they win. This is especially concerning since, for many Pennsylvanians, their home is the most valuable and important asset that they own.

This article will explain what happens when a judgment is entered against a defendant (in other words, the person being sued) and how that may affect the defendant’s ownership interest in their home.

What does it mean when a judgment is entered against the defendant?

A judgment is an award by the court granting a plaintiff some sort of relief against a defendant. A judgment is typically a court order directing a defendant to pay a plaintiff a sum of money.

Before a plaintiff can even attempt to collect from a defendant’s assets, they must first obtain a judgment against the defendant. Without a judgment, a plaintiff does not have the authority to take any property owned by the defendant. The plaintiff must win the lawsuit first.

In general, a plaintiff can only obtain a judgment against a  defendant after one of the following things occurs:

  • a plaintiff wins the lawsuit after a trial;
  • the parties agree to a settlement that will be entered as a final judgment; or
  • the defendant fails to respond to the lawsuit and a default judgment is entered against them.

When a judgment is entered for any of the reasons listed above, it gives the plaintiff the right to collect the amount of money ordered in the judgment.

Once a judgment is entered, the parties often negotiate a process and timeline for the defendant to settle the judgment through direct payment. In some cases, the defendant can’t or won’t agree to pay the judgment and the plaintiff has to take additional steps to get their money. This process is called “executing” the judgment.

A judgment may be executed in a variety of ways including seizing assets held in bank accounts and, in some cases, levying and selling the defendant’s real property, including their home.

Not All Real Estate Is Subject to Execution

The type of ownership interest the homeowner has in the property will determine if the plaintiff can go after a defendant’s home to satisfy their judgment. In general, if a homeowner owns the home by themselves, it will be subject to execution should the defendant fail to otherwise pay the judgment. However, it is not as straightforward if there are multiple owners on the deed to a defendant’s home.

In Pennsylvania, there are three main types of  concurrent, or joint, real estate ownership, which are described in more detail in this blog. Here is how execution of a judgment of real estate affects ownership in the three main types of joint ownership:

  • Tenants in Common: This is the default joint ownership. When a deed does not state the type of joint ownership, it is presumed that the joint owners are tenants in common. If there is a judgment against one tenant in common, the plaintiff can go after that owner’s share in the real estate to satisfy the judgment.
  • Joint Tenants with Right of Survivorship: This is very similar to tenants in common. If a plaintiff gets a judgment against a joint tenant, the plaintiff can go after that tenant’s share in the real estate to satisfy the judgment.
  • “Tenants by the Entireties”: This ownership type typically applies to married property. When a married couple buys a house, it is presumed it was purchased as tenants by the entireties. Tenancy by the entireties is unique because it protects the house from judgments that are against only one owner. If a plaintiff secures a judgment against one owner but not the other, the plaintiff cannot go after the house to satisfy their judgment. This rule does NOT apply if a plaintiff obtains a judgment against both spouses. In that case, the plaintiff can satisfy their judgment with the house owned by both spouses

What Can I Do To Protect My House If I Am Sued?

The most important thing take away from this article is that you must take all lawsuits filed against you seriously, especially if you own a home. If a suit has been filed against you, you should immediately meet with an attorney who will help you navigate the legal process and reduce the risk of losing your home.

Another important consideration is to know and trust anyone you are purchasing real estate with. If you are purchasing a home with a friend, sibling, parent, or partner, make sure they are financially responsible and will be upfront about any issues that may affect any ownership interest in the property. Even if you do everything right, if your co-owner does not make good decisions and is not transparent about any problems that may affect the property, your interest can still be at risk.

If you find yourself facing a lawsuit or execution of a judgment, contact one of our attorneys to discuss your options and the best way to minimize the judgment and protect your assets.