Collecting a Judgment: Property Could Be the Golden Ticket

In a perfect world, losers in civil litigation cases would be standing outside the courtroom with an open checkbook and a dose of humility to boot. But the world is by no means perfect. Therefore, winning parties (also known as judgment creditors) need to be willing to do whatever it takes to get paid. Here is a hint: they should always be ready to look for property.

Property could be the golden ticket when a judgment debtor either does not have the income to pay or seems unwilling to cooperate. Courts tend to look at certain types of property as a means to make payment. For the judgment creditor, that’s very good news. It is bad news for the debtor.

Two Options for Property

Taking advantage of a debtor’s personal property to affect payment generally involves one of two options. The first option is to file a judgment lien. Just like a construction lien or a lien placed on a home by a mortgage lender, a judgment lien establishes a legal interest in the property in question.

As long as the lien remains attached, any move by the owner to sell or otherwise transfer the property is subject to payment of the debt. Selling would require the settling of any and all liens attached to the property.

The second way to leverage property in a judgment collection scenario is to petition the court for a writ of seizure. A writ of seizure is just as its name implies: it is a court order allowing the seizure of personal property. With such a writ in hand, the local sheriff can seize a debtor’s property and sell it. Sale proceeds would go toward paying his debt.

Different Types of Property

At this point, it is important to point out that the states regulate judgment liens and writs of seizure differently. In some states, virtually any type of personal property is up for grabs. If there isn’t a practical way to file a judgment lien against a certain asset, the writ of seizure is always an option.

In other states, judgment creditors are limited in terms of the property they can go after. For example, plenty of states protect a debtor’s primary residence from collection efforts. Some of the states also protect vehicles debtors need to get to and from work.

Still other states subject primary residences to collection efforts but still protect a set value through what is known as a homestead exemption. A creditor can go after a primary residence but only a certain amount of its value is in play.

Searching for Property Is a Priority

All of this is to say that searching for property is a priority when you are trying to collect a judgment. That’s why collection agencies like Salt Lake City-based Judgment Collectors put so much effort into property searches. Property is to judgment collection what evidence is to prosecuting a criminal case.

A judgment debtor may have a valuable piece of investment property he wants to protect from collection efforts. So he finds a way to hide that property, at least from his perspective. What he doesn’t know is that a skilled collection agency knows how to find properties debtors are trying to keep secret. And once said properties are found, the proverbial cat is out of the bag.

Property is often the golden ticket to collecting outstanding judgments because it is so valuable. A debtor who suddenly finds his property in jeopardy might also find himself highly motivated to settle up. That is the whole reason for going after property in a judgment collection scenario.