Collecting Money After a Judgment

After a party has prevailed in court, and has received a judgment against another litigant, they may think that the difficult part of the litigation is over.  Indeed, it may be expected that the losing party will pay the judgment quickly, and the litigation will be concluded.  However, sometimes parties refuse to pay a judgment against them, and other times parties are incapable of quickly paying money owed after a case is tried in court.  Nevertheless, collecting money after a judgment can be easier if litigants use a few methods to recover sums owed once litigation concludes.

Wage Garnishment

One of the most effective ways of collecting money after a judgment is wage garnishment.  This method allows a party with a judgment to compel an employer to set aside a certain amount of a judgment-debtor’s wages so that a judgment can be satisfied.  Normally, people wish to avoid the burdens and the embarrassment associated with wage garnishment, so if they have the funds to pay a judgment outright, they may do so when faced with wage garnishment.

Wage garnishment requires several steps in order to ensure that it is successfully implemented.  First, a party needs to research a judgment-debtor and determine where that person works and any information about the amount of money that individual is paid.  This can be revealed through post-judgment discovery or private investigation efforts undertaken on behalf of a party.  Then, a party needs to apply for a writ of garnishment or similar instrument from a court authorizing the garnishment and determining the amount of the garnishment.  Finally, the employer needs to be apprised of the wage garnishment so they can remit payments to the judgment-creditor.  Depending on the jurisdiction, there may be limits on the extent of the garnishment, but this strategy is usually an effective method at collecting money after a judgment.

Liens

Another important means of collecting money after a judgment is through liens.  Essentially, a lien is an encumbrance on real or personal property that requires the party owning the property to pay a creditor if that property is ever sold or transferred.  Some liens also allow a party to sell property so that a judgment may be satisfied.  Some common liens include mortgages, liens on property through a security agreement, or other contracts that designate certain property to act as collateral to consummate a transaction.

The law surrounding liens is often extremely complicated, and there are many protections in place to safeguard judgment creditors from overly burdening debtors.  If the process of establishing liens is not carefully followed, liens may not provide a recourse for collecting money after a judgment.  However, liens can be a powerful tool when ensuring that a party pays another after a judgment has been entered.

Bank Accounts

One of the easiest methods of collecting money after a judgment is to collect money from a debtor’s bank accounts, also called a bank levy.  The first step of this process is to discover which financial institutions hold the debtor’s funds, and this information can be uncovered during post-judgment discovery or from private investigations.  Then, a litigant must ask a court for a writ of execution, which essentially instructs a bank to deduct funds to satisfy the judgment.  Once the appropriate personnel at a financial institution are apprised of the writ of execution, funds maintained by the debtor at that bank can be used to pay a judgment-creditor.

It should be noted that not all funds in banks can be seized by creditors to satisfy a judgment.  For instance, federal law protects some funds that individuals receive from social security from bank levies.  In addition, other federal and state laws might also restrict efforts to collect money from a debtor’s bank account.  A skilled attorney should know all of the restrictions involved with levying a bank account and ensure that the most amount of money is recovered as quickly as possible.

Settlement Agreements

Because collecting money after a judgment may be a burdensome process, sometimes settlements between the parties are needed to quickly recover funds.  For instance, after losing in court, a party usually has the chance to appeal the case to a higher court.  During the time that a matter is being appealed, courts typically prevent parties from attempting to recover a judgment.  As a result, parties will sometimes agree to accept less money than the full amount of the judgment so that the other party waives their right to appeal and so that the matter can be resolved as soon as possible.

In addition, sometimes parties have difficulty paying for a judgment all at once because they do not have sufficient funds on hand.  However, parties are oftentimes better able to pay off judgments over time.  As a result, parties oftentimes agree that a debtor can pay off a judgment over a period of time.  Of course, the terms of any settlement agreement need to be carefully considered so that there are severe consequences if a debtor defaults on the settlement agreement and the parties need to go back to court.

The Rothman Law Firm is experienced with all steps of the litigation process, and we understand all of the methods of collecting money after a judgment.  If you are looking for an experienced New York and New Jersey litigation lawyer to handle your litigation matter, please feel free to contact The Rothman Law Firm to request a free legal consultation.