A lien on property is a useful tool for squeezing money out of someone who hasn't paid up. Once a property has a lien on it, the chances of selling or refinancing are nil until it's paid off. That's good for the creditor, but if you're a co-owner of the debtor's real estate, it's not such good news. In most cases, joint ownership doesn't stop liens.
Types of Ownership
If you and your co-owners are tenants in common, the creditor's lien only attaches to the debtor's share of the property. It's still an obstacle to selling the entire property, but your creditor can't foreclose or claim any other ownership shares. With joint tenancy, the creditor's lien attaches to the entire property. Tenancy by the entireties is a special case only available to spouses and only in some states. With entireties, unless you both owe the debt, the creditor probably can't put a lien on the property.
Community Property
In community property states, you and your spouse are legally entitled to half each other's income accrued during the marriage. You're also responsible for half of each other's debts. If you co-own investment property with your spouse, her creditor can not only put a lien on the house, but he also can apply the lien to the entire property, not just your spouse's legal half. Some states make an exception and won't let creditors apply liens to marital property.
Creditor Options
Creditors don't usually foreclose on a judgment lien because other liens -- the mortgage, for instance -- would get paid off first. Instead, the creditor may wait until you and your co-owners are ready to sell. No lender will write a mortgage on a house that already has a prior lien on it, so the lien has to be paid off. If a creditor does foreclose, the effect depends on whether the law lets him sell the house or just the co-owner's share.
Breaking It Up
One way to deal with a lien on one person's share is to partition the property. Partitioning divides up property among the co-owners so that each gets a share. This can be physical division -- for example, with a big tract of individual land -- or selling and dividing the money. The creditor would have to get paid for the sale to go through, though. If you and your fellow owners don't agree, you can ask a judge to make the partition. Some types of ownership, such as tenancy by the entireties, can't be partitioned.
