Most people pay their debts, so offering unsecured lines of credit can be a lucrative financial enterprise. However, collecting payment from those who default can be costly in both time and money. Still, it is often worth it to take the extra measures to collect rather than write off the debt.
In Ohio, taking the debtor to court could result in at least some compensation, even if he or she does not have the money to pay the unsecured debt.
According to the Ohio Revised Code, in any of the state or federal district courts, a judgment or decree within the state constitutes a lien on the debtor’s real property. A judgment may include interest that the debtor must also pay, as well as any filing fees and other costs that are part of the legal action to obtain the judgment.
The judgment does not become a lien until the court clerk certifies and files the paperwork. When the clerk has completed the process, he or she enters that date on the certificate. Interest accrues from that date, and the judgment lien is valid for five years.
The lender can transfer the judgment to another court to begin collection proceedings without affecting the amount or the process. This may be necessary if the debtor owns property in another county, and the creditor wants to collect on the judgment there.
The debtor may be able to sell or refinance the property to pay the judgment. If that is not an option, then the debtor may need to begin the repossession process.
Not every type of property may have a lien attached to it, and some exemptions apply. Wage garnishments and other collection methods may be more appealing when there are obstacles to successful judgment liens.