Winning a civil case and having a judgment entered against a debtor doesn’t automatically guarantee payment. In fact, litigation is just the start of a much longer process engaged in by creditors, their attorneys, and specialized judgment collection agencies.
The thing to understand is that a judgment is little more than an official court record. Rarely do courts enforce judgments on their own. Enforcement is left up to creditors and their attorneys and governed by the statutes of that particular state.
So how do creditors collect on judgments? There are numerous methods allowed by the laws of the state in which the judgment was entered. Below are the five most common, according to Salt Lake City judgment collection agency JudgmentCollectors.com:
1. Voluntary Payment Plan
Agreeing to a voluntary payment plan with the debtor is the most amicable solution. There are some debtors who really do want to pay what they owe. They just lack the financial resources to pay the entire bill up front. They tend to be cooperative in establishing payment plans.
Unfortunately, such cooperation is not always forthcoming. Some debtors generally don’t have the resources to pay. Others do but simply refuse. In either case, a creditor’s attorney or collection agency must pursue other avenues.
2. Wage Garnishment
Most states allow creditors to garnish wages. Following successful litigation, the creditor’s attorney presents the debtor’s employer with a copy of the judgment and a wage garnishment order. That employer is required by law to withhold money from the debtor’s pay and turn it over to the creditor’s attorney.
State law dictates how much money can be forcibly withheld each pay cycle. It might not be much in some cases, but wage garnishment is a pretty straightforward collection method.
3. Judgment Liens
Judgment liens are also allowed in most states. A judgment lien is a lien placed against a piece of real property, thereby preventing it from being sold until the lien is satisfied. This is one of the most effective collection tools to use against debtors with real property. No one likes being constrained by liens. As such, judgment liens are quite motivating.
4. Writs of Execution
Next up are writs of execution. They are not available in every state, but they can be quite effective where allowed by law. A writ of execution is essentially a court order that gives local police the authority to seize and sell assets on behalf of creditors. Writs of execution are almost always handled by the local sheriff.
Note that certain types of assets are untouchable. For example, a sheriff generally cannot seize and sell a debtor’s primary residence. What is and is not allowed is a matter of state law.
5. Freezing Bank Accounts
Finally, some states allow for the freezing of a defendant’s bank accounts. More often than not, this action must be taken by a court. An attorney or judgment collection agency doesn’t have the authority. For this reason, freezing bank accounts is considered a measure of last resort by many judgment collection agencies.
When bank accounts are frozen, a court can actually order funds from the frozen accounts transferred to the creditor for payment. A court can take all the money or just a portion of it. Again, this sort of thing is governed by state law.
If you have had a judgment entered against you, rest assured your creditor has tools for extracting payment. Your best bet is to avoid having to deal with professional judgment collectors by just agreeing to a monthly payment plan and sticking with it.