Judgment enforcement against third parties is a critical aspect of the collection process, often involving various legal challenges. Once a party wins the judgment, they can collect the judgment awarded using various enforcement methods. The most common method of judgment enforcement is income execution, where a fraction of the debtor’s salary or wage is transferred to the creditor until the full amount of judgment is satisfied. However, judgment enforcement is not easy and requires a thorough understanding of the legal complexities to determine and use the most appropriate method of collection. One of the common challenges arises when debtor hide their assets to evade payment, which makes it more challenging to enforce the judgment and recover the owed amount.
In this blog, we will understand judgment enforcement, exploring the nuances and how it can be easily implemented. First, let’s understand what is judgment enforcement.
What is Judgment Enforcement?
Judgment enforcement refers to the court order that allows creditors to use strong tools if the debtor refuses to pay. Once the court issues the judgment, the creditor gets the right to collect the specified amount of money owed. They need to take additional steps to facilitate the collection process. Judgment enforcement requires various tools that can vary depending on the jurisdiction. These tools include seizing assets, wage garnishment, liens, and levies. In some cases, creditors also needed assistance from financial institutions or employers to satisfy the amount of debt.
Legal Judgment and Parties
Legal judgments are typically issued by the court to resolve the dispute between two parties. Understanding the different types of judgment is crucial to making an informed decision.
Judgment Against Third Parties
Enforcing judgment against third parties requires a strategic approach designed to compel compliance and ensure the judgment is recovered. Here we will discuss some important judgment enforcement methods that can work against third parties:
Bank Account Garnishment
This is the most common and effective method of judgment enforcement. A bank is a third party that holds the debtor’s assets. The bank will remit the money to the creditor subject to the terms of the garnishment. If the creditor knows the debtor has an account, they can get a court order to freeze or seize the funds from their account. To do this, the creditor must submit the garnishing bill to the court. Once the court issues a bank account garnishment, the bank is required to seize the debtor’s account and transfer the money to the creditor. However, certain funds may be exempt from the garnishment, such as government benefits and funds protected by the law.
Wage Garnishment
Wage Garnishments involve holding a portion of the debtor’s salary until the full amount of judgment is satisfied. The court allows the debtor’s employer to hold a specific amount of the debtor’s wage and send it to the creditor. The employer becomes the third party in this process and they are compelled to hold a portion of a judgment debtor’s salary to satisfy the judgment.
Property Liens
A property lien is a legal claim against a property in the event of unpaid debts. It is considered a security payment option in default events. Using this approach, the judgment creditor can place a lien on the debtor’s property to satisfy the judgment. This approach requires filing a lien on the relevant government office. This means a lien must be satisfied before the property gets sold or refinanced. If a third party, like a company or bank, is involved in refinancing or selling the property, it could be beneficial for the creditor. These third parties can help in judgment satisfaction until any transaction takes place.
Seizure of the Property
If a debtor owns valuable properties, seizing their property can be a good option to recover your owed money. To enforce the judgment on property, creditors must take orders from the court, typically known as a writ of execution. This order allows the law enforcement officer to seize and sell the debtor’s property to satisfy the judgment.
Tips For Judgment Enforcement
For successful judgment collection, it is important to identify and locate the debtor’s property and assets. This requires a careful investigation of the debtor’s assets, including real estate and public property. Third parties like real estate and mortgage may have an interest in debtors’ assets. These parties may also have a specific claim on the debtor’s personal property. Identifying these relationships can help you determine the feasibility of judgment enforcement.
Use Different methods
Using a single judgment enforcement method does not always work. It is a good idea to combine different methods, such as garnishments, liens, and seizures, to make effective enforcement.
Legal Help
Enforcing a judgment can be complex, especially if you are unfamiliar with the legal framework. Hiring a professional debt collection attorney can provide you with guidance to ensure compliance with the laws.
Conclusion
Enforcing legal judgment is an important part of judgment collection. However, it could be challenging without the right tools and knowledge of the legal frameworks. By understanding the legal tools and strategies against third parties, creditors can improve their chances of successful judgment recovery. If you are struggling to recover your money and do not know which method will work best, contact Public Loss Adjusters. We will use the best enforcement method to recover your hard-earned money from delinquent debtors.
