Judgments & How Collections Agencies Enforce Them
Once you have won a judgment, you are now considered the judgment creditor. As a creditor, there are many collection techniques available. In fact there are more techniques available than when you try to collect debts before getting a court judgment. Below are listed methods of collecting a judgment and limits to what property you can take.
Methods of Judgment Collection
Wage Attachment/Income Execution:
The first item we will go after is the judgment debtor’s paycheck through wage attachment or garnishment. This is a very effective technique when the debtor is receiving a regular paycheck. Even though a person receives a paycheck, they still may not be willing to pay for one reason or another. Through wage garnishment, you are sure to receive your money from the debtor before they get a chance to even see the money. Federal law allows a certain amount of the debtor’s earnings to be taken by the creditor, in most states. There are higher limits for certain types of debt, such as child support and income taxes.
In most states, once a judgment is entered against a debtor there is a lien automatically placed on the real property they own in the county where the judgment was obtained. Instead of waiting for the debtor to sell their property, you the creditor can “execute” on the lien. This means having the sheriff seize the property and arrange for public sale from which you are paid out of the proceeds. This is an extreme measure that needs to be considered carefully. The expense and hassle of executing a lien may not be worth the return on the sale.
A property execution is a way of taking personal items from your debtor in order to pay the debt owed. This is where you, as the creditor, can get a “writ of execution” from the court and go after the personal property of the debtor. Only a judgment creditor can levy a debtor’s property, so the judgment must be awarded first. After a sheriff takes the personal property (a baseball card collection, for instance) they will sell it and the proceeds will go to paying off the debt.
An assignment order allows the creditor to go after property that cannot be subject to a levy. For example, this can be an anticipated tax refund or an annuity policy.
Limits on What a Judgment Creditor Can Take
This is something that varies state to state. The professionals at Accounts Retrievable will be able to navigate through the laws by utilizing our nationwide network of attorneys. Every state has certain property that is considered “exempt” from being seized by a creditor. You can learn more here about what is exempt from debt collection in New York State.