Few things are more validating than winning a contested court case. Your dispute has been reviewed by a judge and jury. After considering all the facts, the Court has found in your favor. Along with the feeling of vindication, you may have been awarded a money judgment. Insurance companies pay quickly. On the other hand, individual litigants—some unbound by ethical concerns—can make obtaining payment more difficult than obtaining the judgment in the first place.
After entry of the judgment, judgments debtors have 21 days to make payment. However, if the judgment debtor doesn’t pay within that time period, what happens next? Debtor’s prisons are illegal, so a Court doesn’t have the authority to put someone in jail for disobeying the order. What comes next if the judgment debtor doesn’t pay?
After the 21-day period expires, you can return to court and request an order of either garnishment or seizure. Seizure is where a court officer takes property owned by the judgment debtor, selling it to satisfy the judgment. Garnishment is receiving payment from a third-party who is holding an asset for the judgment debtor. If you garnish wages, the employer will send you periodic installments. If you garnish a bank account, the bank will send you a lump sum.
Although the process sounds simple at first glance, it can sometimes devolve into an excruciatingly frustrating experience. You have to know certain basic facts in order to execute your judgment. For instance, if you want a bank to garnish a savings account, you have to know where the judgment debtor banks. If you want to garnish wages, you have to know where he works. Without specific information, it is impossible to garnish the judgment debtor.
Asset seizures pose a completely different set of problems. The basic operation of an order for seizure directs a sheriff to go to the judgment debtor’s home and take whatever assets appear to be valuable in an auction. Certain assets are exempt, and the officer conducting the seizure will have experience in what is suitable property for an auction. After the seizure, the officer will conduct an auction, raising as much money as possible. If the amount raised is not enough to satisfy the judgment, the officer will seize real property. Again, certain property is exempt, but non-exempt property will be sold at auction to satisfy the judgment. Seizure can prove difficult if the judgment debtor has hidden personal property and/or does not own non-exempt real property.
The way to find assets is through a creditor’s exam. You can obtain a subpoena signed by a judge requiring the judgment debtor to show up in court on a specific date and time. The judgment debtor must also bring documentation, such as bank statements or deeds. The exam begins with the judgment debtor being put under oath, making any lie criminal perjury. The judgment debtor can be asked questions such as, “Where is your classic car collection stored?” Once you have the relevant information, you can obtain an order of garnishment or seizure. If you garnish a bank account, you will typically receive a check directly from the bank, which is ideal. Seizure requires a sheriff go take personal property, sell it at an auction, take fees out of the proceeds, and then disburse the funds to you—a long and costly procedure.
Fortunately, the collection process typically resolves before the creditors’ exam. More often than not, simply being threatened with a subpoena is sufficient motivation to pay the debt or enter into a payment plan. Having experienced counsel can assist in this process. If you have any questions about collecting a judgment, please call the experienced attorneys at Neumann Law Group for a free consultation.