The losing party rarely writes a check at the courthouse. The more usual scenario finds the winner continuing to use the judicial system to enforce a judgment.
*The first step to enforcing a judgment is to protect the judgment from transfers of property by the Debtor. One way to protect the judgment is to create a valid “judgment lien”. This is done by properly recording and indexing an abstract of the judgment in each county where the judgment debtor owns, or might own, property.
The judgment lien “attaches” itself to all of the Debtor’s non-exempt property in the counties where it is recorded. The recorded judgment lien will also attach to exempt property automatically when the property ceases to be exempt, as well as to property the Debtor later acquires.
Under most state laws individuals have certain property that is exempt from being seized for debts, however, corporations have no such exempt property. The judgment lien is good initially for ten years, and can be revived so that it endures indefinitely.
*Once the judgment is filed, you have a variety of remedies available to satisfy the judgment. But first you need to find assets of the Debtor.
This can be done through post-judgment questions directed to the Debtor, interviews of the Debtor under oath, or using databases or private investigators to search for assets. After determining what the Debtor owns and where the property is located, you will be better equipped to analyze what additional steps should be taken in collection of the judgment.
*One of the more common collection tools is a “writ of execution”. A writ of execution is a judicial order directing the enforcement of a judgment. The writ instructs a court officer (sheriff or constable) to:
- seize the Debtor’s non-exempt property,
- sell it at auction, and
- deliver the proceeds to the you. Under most state laws it directs that seizure shall first be upon property designated by the Debtor when the writ is served. However, if the Debtor fails to designate specific property to be seized, or if the court officer believes the designated property will not sell for enough money to satisfy the execution and costs of sale, the officer will require the Debtor to designate additional property or simply seize any of the Debtor’s non-exempt property.
*If you find cash, or learn that the Debtor has funds or property owed to it by a third party, you might choose to exercise the remedy known as “garnishment”.
You can obtain a garnishment judgment which orders the third party (which may be a bank) to pay the funds or property to you rather than to the Debtor. A garnishment order is issued by the Court without prior notice to the Debtor so that the Debtor will not have an opportunity to move the liquid assets. When the order is served on the third-party the Debtor’s account is temporarily frozen. To obtain a garnishment order, the judgment holder must tell the court that as far as he knows, the Debtor does not have enough property in its possession in this state to satisfy the judgment.
*There are risks to filing a garnishment action. For example, if the third party is not holding money or property owed to the Debtor, you may be responsible for the payment of the third party’s attorney’s fees to respond to the garnishment.
Garnishment is most frequently used to seize cash or liquid assets. It usually gets the Debtor’s attention very quickly.
*Another commonly used post-judgment remedy is the “Turnover Order”, so named because it literally orders the Debtor to turn all non-exempt property over to the judgment holder. This remedy allows a judgment holder to spread a wide net to catch all available assets when the Debtor’s property cannot readily be attached or seized by ordinary legal process.
For instance, when all your efforts to locate the Debtor’s assets fail, you may want to seek a “Turnover Order”. This remedy is usually used when no other means to satisfy the judgment are available, however it does not require that a judgment holder exercise all other post-judgment remedies before seeking the order.
*Methods of turning that judgment into cash are complicated and each comes with its own cost and risk. You will want to evaluate each available post-judgment remedy on a risk-benefit basis before proceeding.
The information provided in this report does not represent legal advice. If and when you face a specific legal situation, you should always conduct independent inquiries with legal professionals to determine what your legal rights may be.
http://www.ckfraud.org/judgement.html