LawyerLandLegal Glossary

Collecting a Judgment

Winning a case and being paid are two different things - the second is a separate process the winner has to start.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

A money judgment is a court's declaration that one person owes another a sum. It is not a transfer of money and it does not instruct anyone to pay. If the losing party - now the judgment debtor - does not pay voluntarily, the winner has to take further steps, and those steps are a distinct area of law with its own procedures, costs and time limits. A great many judgments are never collected at all.

The usual tools are garnishment of wages, in which an employer is ordered to divert part of the debtor's pay; levy or attachment of a bank account; and a lien recorded against real property, which typically has to be paid before that property can be sold or refinanced. Which are available, and in what order, is state law. Before any of them can be used effectively the creditor generally needs to know what exists to take, and most systems provide a formal procedure - variously called a debtor's examination, discovery in aid of execution, or supplemental proceedings - to compel the debtor to answer questions about their assets under oath.

A large amount of property is exempt and cannot be taken at all, which is the half of this subject debtors most need to know. Federal law caps how much of a person's earnings may be garnished for ordinary debts and forbids an employer from dismissing someone over a single debt's garnishment. Federal benefits - Social Security, SSI, veterans' and certain other payments - are broadly protected from ordinary creditors, and there is a federal rule requiring banks to review recent deposits and automatically protect a portion of directly deposited federal benefits when an account is frozen. States add their own exemptions covering things such as a home, a vehicle, tools of trade and household goods. Exemptions are not always applied automatically: in many states the debtor has to claim them, in writing, within a period set by the rules.

Judgments also last a long time. States typically allow enforcement for a substantial number of years and commonly permit renewal, with interest accruing throughout at a rate set by statute. A judgment that cannot be collected today is not extinguished by that fact.

Where this comes from

Enforcement of judgments is governed by state law; Federal Rule of Civil Procedure 69 directs federal courts to follow the procedure of the state in which they sit. Federal limits sit on top: the Consumer Credit Protection Act restricts garnishment of earnings and prohibits discharge for a single indebtedness at 15 U.S.C. §§ 1671-1677, Social Security benefits are protected from most creditors by 42 U.S.C. § 407, and the garnishment of accounts containing directly deposited federal benefits is regulated by 31 C.F.R. part 212. Conduct by a third-party debt collector remains subject to the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p. The duration of a judgment, its renewal, the available exemptions and any period for claiming them are all set by state law and this page states none of those periods.

When people hire a lawyer for this

For the creditor, the question worth asking before spending anything is whether the debtor has attachable assets at all, because enforcement costs money and a judgment against someone with only exempt income is not worth pursuing - and that assessment is cheap to get. For the debtor, the highest-value advice comes the moment a garnishment or account freeze appears: exemptions are frequently available and frequently missed, they are often lost by not being claimed in time, and protected federal benefits are sometimes frozen anyway by a bank that has to be told. Legal aid programmes handle exemption claims routinely and this is one of the areas where they most often act quickly.

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.
If you cannot afford a lawyer, civil legal aid programmes provide free help with many of these problems: civil legal aid programmes by state.