We’ve all heard the saying “a judgment is not worth the paper it’s written on.” The chance of a losing party freely and timely paying a money judgment is more ideal than real. The good news is there are several post-judgment remedies available to assist the victor in collecting. Executing a judgment requires thoughtful planning, hard work and diligence.
The most common form of collecting is a wage garnishment, which must be served on the judgment debtor’s employer. A judgment creditor may garnish up to 25% of the judgment debtor’s wages. If the employer fails to answer the garnishment, it is liable for the entire judgment amount. A wage garnishment is good for 6 months and can be renewed.
Another method of collecting on a judgment is a bank levy upon any accounts that the judgment debtor has. The financial institution is required to withdraw funds for the judgment creditor’s benefit. Unlike a wage garnishment, there is no limit on how much can be withdrawn.
Personal property can also be seized; this includes inventory if the judgment debtor is a business. Tennessee law provides a $10,000.00 personal property exemption, which means the judgment debtor has the right to claim certain assets that cannot be levied. This is an affirmative defense, which must be raised by the judgment debtor.
Civil money judgments should always be recorded in the local Register of Deeds Office in any county where the Defendant may own real property. A judgment lien forces the sale of property, subject to first deeds of trust or other paramount liens. The judgment lien clouds the title of the real estate and if the judgment debtor sells the property, the judgment lien must be satisfied at closing. Likewise, should the judgment debtor attempt to borrow money on real property, the judgment creditor must be made whole.
There are effective methods to discovering the assets of a judgment debtor, post judgment. The two most common are interrogatories, which are written questions under oath and subpoenaing the judgment debtor into court and questioning him/her on the stand. Judgments are good for ten years and can be renewed.
Civil cases involving money judgments do not end when the verdict is delivered. In fact, that’s where the real work begins. One thing’s for sure: A moral victory doesn’t pay the bills.