Paralegal Advanced Competency Exam (PACE) Practice Exam

What is a judicial lien?

1. A lien obtained by a judgment or other judicial process against a debtor

2. A security interest created by agreement between parties

3. A notice of legal action filed against a property

4. A non-judicial claim against a debtor's property

The correct answer is: A lien obtained by a judgment or other judicial process against a debtor

A judicial lien is defined as a lien that is obtained through a judgment or other judicial process against a debtor. When a creditor secures a judicial lien, it typically follows a legal action in which a court has ruled in favor of the creditor. This type of lien allows the creditor to enforce the collection of a debt by placing a claim against the debtor's property, which ultimately gives the creditor the right to take possession of that property if the debt remains unpaid. This understanding is crucial for grasping how different types of liens function within the legal and financial system. Other options describe different types of liens or claims. A security interest created by agreement refers to consensual agreements between parties, while a notice of legal action does not establish a lien but informs parties about pending litigation. Finally, a non-judicial claim implies an assertion that does not involve court processes, which contrasts with the nature of a judicial lien.