You’ve pursued your case and you’ve won. What does that mean? A judge has provided you a favorable judgment. The judgment is a piece of paper with the judge’s signature indicating her agreement that you have been wronged and should be compensated X amount. As you are probably already aware, a judgment is not money in the bank.
How do you go from Point A: A Favorable Judgment, to Point B: Money in the Bank? It depends. The path may be short and smooth but it can also be long and windy. With a little education, you can set reasonable expectations for the road ahead and learn of possible shortcuts.
The names have changed. You are no longer the plaintiff. You are now the judgment creditor, and the person, or entity, now obligated to pay under the judgment, is the judgment debtor. Your goal is to collect on the judgment. Under circumstances where the judgment debtor is a profitable business or an honest and solvent person, collection will be relatively fast and straightforward. More complex circumstances arise when the judgment debtor avoids paying the judgment due to lack of funds, lack of integrity, or disagreement with the judgment.
When seeking to collect a judgment the first step is always to write a letter to the judgment debtor informing her of the judgment and the amount due, including a copy of the judgment. The next step is to take measures in converting the unsecured debt created by the judgment into a secured debt. The easiest way to accomplish this goal is to record what is called an Abstract of Judgment in the county in which the judgment debtor owns real property. An Abstract of Judgment creates a lien on the debtor’s property. This gives the judgment creditor priority over later creditors and forces the debtor to pay off the lien if she ever chooses to refinance or sell her property. Recording an abstract of judgment is the easiest method of securing the debt. You need not know the exact address of the property in order to create the lien.
In contrast, a Writ of Execution creates a lien only upon specified, known property of the debtor. The advantage of a Writ of Execution is that the creditor need not wait for the debtor to sell or refinance real property. Also a Writ of Execution may apply to real or personal property. The creditor provides the Writ to a levying officer, in most cases a sheriff or marshal of the county, with instructions to actively levy upon specified property. The property levied may be a bank account, employee wages, or even a cash register – also known as a “till tap.” Non-monetary property levied upon may thereafter be sold to satisfy the money judgment.
How do you go from Point A: A Favorable Judgment, to Point B: Money in the Bank? It depends. The path may be short and smooth but it can also be long and windy. With a little education, you can set reasonable expectations for the road ahead and learn of possible shortcuts.
The names have changed. You are no longer the plaintiff. You are now the judgment creditor, and the person, or entity, now obligated to pay under the judgment, is the judgment debtor. Your goal is to collect on the judgment. Under circumstances where the judgment debtor is a profitable business or an honest and solvent person, collection will be relatively fast and straightforward. More complex circumstances arise when the judgment debtor avoids paying the judgment due to lack of funds, lack of integrity, or disagreement with the judgment.
When seeking to collect a judgment the first step is always to write a letter to the judgment debtor informing her of the judgment and the amount due, including a copy of the judgment. The next step is to take measures in converting the unsecured debt created by the judgment into a secured debt. The easiest way to accomplish this goal is to record what is called an Abstract of Judgment in the county in which the judgment debtor owns real property. An Abstract of Judgment creates a lien on the debtor’s property. This gives the judgment creditor priority over later creditors and forces the debtor to pay off the lien if she ever chooses to refinance or sell her property. Recording an abstract of judgment is the easiest method of securing the debt. You need not know the exact address of the property in order to create the lien.
In contrast, a Writ of Execution creates a lien only upon specified, known property of the debtor. The advantage of a Writ of Execution is that the creditor need not wait for the debtor to sell or refinance real property. Also a Writ of Execution may apply to real or personal property. The creditor provides the Writ to a levying officer, in most cases a sheriff or marshal of the county, with instructions to actively levy upon specified property. The property levied may be a bank account, employee wages, or even a cash register – also known as a “till tap.” Non-monetary property levied upon may thereafter be sold to satisfy the money judgment.
To find out specifics about a debtor’s assets the creditor may apply through the court for an Order for Appearance and Examination of the debtor. The order mandates the debtor to appear in court to answer questions concerning her assets to aid in the enforcement of the judgment. If the debtor does not appear for the Examination hearing, an arrest warrant may be issued. At the examination the creditor may ask detailed questions about the debtor’s income, location of bank accounts, tangible property owned, and any other assets that may generate proceeds to pay the judgment. The creditor may also require the debtor to provide specific documents such as bank statements at the examination through a Subpoena Duces Tecum.
Yet another option in collection of the debt is wage garnishment of the debtor’s wages. A debtor’s earnings may be reached by obtaining an Earnings Withholding Order and serving it on the debtor’s employer. This order is then enforced by the levying officer who periodically collects a portion of the debtor’s wages and sends it to the creditor.
Costs incurred by the creditor during the collection process including fees for writs, abstracts, or Sheriff’s services may be added to the existing judgment by filing a Memorandum of Costs After Judgment form. Additionally, the original judgment accrues at 10% interest until paid.
The above are useful avenues in landing “Money in the Bank.” Do not forget, however, that there is a bigger picture. Law, like life, is not only about the destination, but the journey. Whenever possible, even when we are “in the right,” we should strive for the path of least resistance. Therefore, if the judgment debtor is not able to pay the judgment in full, it may serve both parties to agree on a payment plan. You may agree to weekly or monthly installments. Make sure to reduce the agreement to writing and keep copies of all checks paid!
A wise lawyer friend of mine told me while I was in law school “Everything is an annoying process, and the end result is kind of annoying too.” This quote is particularly fitting here, as you have won, but does it really feel like winning? My hope is that with the above road map you can set reasonable expectations for the road ahead, and, avoid the repetitive, rhetorical question: “Ugh, are we there yet?”
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Newsletters and articles are offered only for general informational and educational purposes. They are not offered as and do not constitute legal advice or legal opinions. This Newsletter may contain hyperlinks to other resources on the Internet. These links are provided as citations and aids to help you identify and locate other Internet resources that may be of interest, and are not intended to state or imply that we sponsor, are affiliated or associated with, or legally authorized to use any trade name, registered trademark, logo, legal or official seal, or copyrighted symbol that may be reflected in the links. Please include the following information when citing this Newsletter: Grutman, N., “The joys of winning… a judgment: winning and collection.” Weblog entry. Law Bites. April 9, 2012. Date accessed (http://lawbites.blogspot.com/2012/03/joys-of-winning-judgment-winning-and.html).
If you contact us through this website or otherwise in connection with a matter for which we do not already represent you, your communication may not be treated as privileged or confidential. The transmission of an email request for information does not create an attorney-client relationship and you should not send us via email any information or facts relating to your legal problem or question. If you are a client, remember that email may not be secure. There is a risk that your communication may be intercepted illegally. There may also be a risk of waiver of attorney-client privilege and/or work product privileges that may attach to your communication.
In some jurisdictions, portions of this website may be considered advertising. The hiring of an attorney is an important decision, and should not be based solely upon written information about our qualifications and experience. We do not desire to represent clients based upon their review of any portions of this newsletter that do not comply with legal or ethical requirements.
Newsletters and articles are offered only for general informational and educational purposes. They are not offered as and do not constitute legal advice or legal opinions. This Newsletter may contain hyperlinks to other resources on the Internet. These links are provided as citations and aids to help you identify and locate other Internet resources that may be of interest, and are not intended to state or imply that we sponsor, are affiliated or associated with, or legally authorized to use any trade name, registered trademark, logo, legal or official seal, or copyrighted symbol that may be reflected in the links. Please include the following information when citing this Newsletter: Grutman, N., “The joys of winning… a judgment: winning and collection.” Weblog entry. Law Bites. April 9, 2012. Date accessed (http://lawbites.blogspot.com/2012/03/joys-of-winning-judgment-winning-and.html).
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