What happens when a judgement is satisfied?

• A. Transfers title
• B. Extends the loan term
• C. Cancels the debt and defeats any interest in the collateral property
• D. Increases the debt

Answer: (C)

When a judgment is satisfied, the obligation behind it has been fulfilled, and the court recognizes that the claim is paid or resolved. The effect is to cancel the debt tied to that judgment and to release any lien or security interest the judgment created on collateral property. In practical terms, the creditor’s claim ends, and the property is no longer encumbered by that judgment lien because the satisfaction is filed with the court (and often noted in land records) to show the lien is released. This does not transfer ownership to the creditor, nor does it extend the loan term or increase the debt.