The priority of a federal restitution lien against other creditors turns on one date: when the government files public notice of the lien in the recording office for the state where the defendant’s property sits. Before that filing, four categories of third parties can take the property free of the lien. After it, the lien competes on a first-in-time basis with other recorded interests, subject to a set of exceptions borrowed from the federal tax lien rules. The governing statute, 18 U.S.C. § 3613, treats a restitution order as if it were an assessed federal tax debt, which is why tax lien priority principles do most of the work here.
Two Different Dates: When the Lien Attaches and When It Takes Priority
A federal restitution lien arises automatically the moment the sentencing judge enters the restitution order. Under 18 U.S.C. § 3613(c), that order is a lien in favor of the United States on all property and rights to property belonging to the defendant, with the same force as a federal tax lien.1Office of the Law Revision Counsel. 18 USC 3613 – Civil Remedies for Satisfaction of an Unpaid Fine Real estate, bank accounts, vehicles, and investments are all captured.
But attachment is not priority. Section 3613(d) makes the lien enforceable against outside parties only once the government files a notice of lien in the manner required for federal tax liens under 26 U.S.C. § 6323(f), which usually means the county recording office where the property is located. The Department of Justice files these notices in every county where the defendant is known to own property.2United States Department of Justice. Restitution Process
Before the notice is on file, four categories of people can take free of the lien no matter when the judgment was entered: purchasers of the property, holders of security interests such as lenders, mechanic’s lienholders, and judgment lien creditors. Once the notice is recorded, those parties are on constructive notice, and the restitution lien becomes enforceable against them going forward. That filing date is the starting line for most priority fights.
How the First-in-Time Rule Applies
The basic rule is simple. A restitution lien whose notice was filed before a competing lien beats that competing lien. A restitution lien whose notice was filed after loses to it. Creditors get paid in the order their interests were perfected, and any shortfall falls on whoever recorded last.
Mortgages and Other Recorded Security Interests
A mortgage or deed of trust recorded before the government files its restitution lien notice has priority. If the defendant took out a home loan in 2018 and the notice was recorded in 2022, the lender is paid first from any sale proceeds, and the restitution lien reaches only the remaining equity.
Purchase-money mortgages sit in a stronger position still. Under the federal tax lien rules, a loan used to acquire the property that secures it takes priority even over a previously recorded federal tax lien, on the reasoning that without the loan the property would not exist for the lien to attach to. Because § 3613(d) imports the same § 6323 exceptions, a good-faith purchase-money mortgage likely receives that same protection against an earlier-recorded restitution lien notice.1Office of the Law Revision Counsel. 18 USC 3613 – Civil Remedies for Satisfaction of an Unpaid Fine
State and Local Property Tax Liens
Real property tax liens occupy a special slot. Under 26 U.S.C. § 6323(b)(6), a real property tax or special assessment lien that has priority under local law over earlier-recorded security interests also has priority over a federal tax lien, regardless of filing order.3Office of the Law Revision Counsel. 26 US Code 6323 – Validity and Priority Against Certain Persons Because federal restitution liens incorporate the same § 6323 exceptions, a local property tax lien can defeat a previously filed restitution lien whenever state law gives that tax lien superpriority. Most states do, so in practice local property taxes almost always get paid ahead of a federal restitution lien.
Private Judgment Liens
A private creditor who wins a civil suit and records a judgment lien before the government files its restitution lien notice takes priority. The restitution lien reaches only what is left. Reverse the timing and the result flips: a restitution notice filed first beats a later-recorded private judgment.
Third Parties Who Beat the Lien Even After Notice Is Filed
Recording the notice does not make the restitution lien invincible. Section 3613(d) states that the lien is invalid against the same interests that would defeat a properly filed federal tax lien, and the § 6323 exceptions apply on their own terms:3Office of the Law Revision Counsel. 26 US Code 6323 – Validity and Priority Against Certain Persons
- A buyer of stocks or bonds who had no actual knowledge of the lien at the time of purchase takes the securities free of it.
- A motor vehicle buyer who takes possession without actual knowledge of the lien is protected.
- Tangible personal property bought at retail in the ordinary course of the seller’s business is shielded, unless the buyer intended to help the defendant evade the debt.
- Household goods and personal effects bought in a private, non-commercial sale for less than $1,000 are protected if the buyer had no knowledge of the lien.
- A mechanic or repair shop holding property under a local-law possessory lien for repair costs keeps priority as long as they maintain continuous possession.
- State and local real property tax and special assessment liens with local-law superpriority defeat the federal lien regardless of timing.
These carve-outs exist because ordinary commerce would stall if every buyer had to run a lien search first. They apply the same way whether the underlying federal debt is a tax assessment or a restitution order.
Victim-Filed Liens Run on a Separate Track
The government’s lien is not the only claim on the defendant’s property. Under 18 U.S.C. § 3664(m)(1)(B), a victim named in a restitution order can ask the court clerk to issue an abstract of judgment in the victim’s own name. Once recorded in the appropriate local office, that abstract becomes a lien on the defendant’s property in that state with the same force as a judgment from a state court of general jurisdiction.4Office of the Law Revision Counsel. 18 USC 3664 – Procedure for Issuance and Enforcement of Order of Restitution
A victim’s lien is governed by state law, not by the federal tax lien framework. Its priority against other creditors depends on when it is recorded relative to other liens under whatever rules the state applies to civil judgments. A victim who files quickly, in a state with favorable judgment lien rules, can secure a strong position on the defendant’s assets independently of the DOJ’s filing schedule.
How Long Priority Fights Can Arise
A federal restitution lien lasts 20 years from the date the restitution order was entered, or until the debt is paid or otherwise resolved. The underlying liability can run even longer. For restitution, the obligation terminates on the later of 20 years after judgment or 20 years after the defendant’s release from imprisonment.5GovInfo. 18 USC 3613 – Civil Remedies for Satisfaction of an Unpaid Fine A defendant sentenced to ten years in prison could face enforcement for up to thirty years from judgment. If the defendant dies before paying in full, the estate remains liable, and the lien stays in place until the government issues a written release.
Bankruptcy Does Not Change the Ranking
A defendant’s bankruptcy filing does not clear the way for other creditors by knocking out the restitution lien. Under 11 U.S.C. § 523(a)(13), restitution ordered under Title 18 is excluded from discharge.6Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge The debt survives the case, and the lien survives with it.
The automatic stay does not halt federal restitution enforcement either. The Sixth, Ninth, and Second Circuits have each read the “notwithstanding any other Federal law” language in § 3613(a) as overriding the Bankruptcy Code’s stay, allowing the government to continue collection while a bankruptcy case is pending.1Office of the Law Revision Counsel. 18 USC 3613 – Civil Remedies for Satisfaction of an Unpaid Fine For competing creditors, that means the restitution lien’s place in line is set by the § 3613(d) notice filing and the § 6323 exceptions, not by anything that happens in bankruptcy court.