Collecting a Judgment

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

Looking for a lawyer rather than a definition? Skip to the state-by-state list of law firms for this.

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

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 programs handle exemption claims routinely and this is one of the areas where they most often act quickly.

Worried about the cost? A lawyer can be hired for one part of a case only (limited-scope representation), may be paid from what a claim recovers (contingency fee), or may be free through a pro bono program or legal aid; a court can also waive its own filing fees.

Find a lawyer for this in your state

Choose your state to see Collections law firms in the city where we list the most; your city may be under “other cities”, A to Z. A state marked “Bankruptcy & Debt” has no Collections listing yet and opens the broader page.

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Related terms

Other entries in the same area of law, each written from the same primary sources.

• Automatic StayThe immediate, court-ordered halt to most collection activity that takes effect the moment a bankruptcy case is filed.
• Bankruptcy DischargeThe court order that ends personal liability for the debts covered by a bankruptcy case - what it does, what it does not do to liens and co-signers, when it is entered, and how it can be denied or later revoked.
• Bankruptcy ExemptionsThe property a person filing bankruptcy keeps - the home equity, vehicle, household goods, tools, retirement accounts and other assets the law places beyond the reach of the trustee and creditors - and the state-by-state choice of which exemption list applies.
• Bankruptcy Means TestThe income calculation that decides whether a person may file a Chapter 7 case or is steered into a Chapter 13 repayment plan - a comparison of household income against the state median, followed if necessary by a line-by-line deduction of allowed expenses.
• Bankruptcy Trustee and the Meeting of CreditorsThe person appointed to administer a bankruptcy case and the short, sworn examination every debtor must attend - what the trustee is looking for, who actually turns up, and what happens after.
• Chapter 13 BankruptcyA reorganization bankruptcy for individuals with regular income: debts are repaid in part through a court-approved plan.
• Chapter 7 BankruptcyA liquidation bankruptcy: non-exempt property may be sold to pay creditors, and qualifying debts are discharged.
• Non-Dischargeable DebtsThe debts a bankruptcy discharge does not erase - child and spousal support, most taxes, most student loans, criminal fines, debts from fraud or drunk-driving injuries - and the difference between those that survive automatically and those a creditor must ask the court to preserve.
• Preferences and Fraudulent Transfers (Clawback)The trustee's power to undo payments and transfers made before a bankruptcy was filed - a repayment to a relative, a property signed over to a family member, a creditor paid ahead of the others - and why "I paid my brother back first" is a problem rather than a virtue.
• Reaffirmation AgreementA voluntary agreement in a Chapter 7 case to remain personally liable on a debt - usually a car loan - that the discharge would otherwise wipe out, in exchange for keeping the property; what it costs, the court's role, and the alternatives of redemption and simply continuing to pay.
• Small Business Bankruptcy (Chapter 11 and Subchapter V)The reorganization chapter for a business that wants to keep operating while it restructures its debts, and the streamlined subchapter Congress added for small businesses - who qualifies, how a plan is confirmed, and what happens to the owner's personal guarantees.

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