法律英语：44 Judgment Collections（在线收听）

by Michael W. Flynn
First, a disclaimer: Although I am an attorney, the legal information in this podcast is not intended to be a substitute for seeking personalized legal advice from an attorney licensed to practice in your jurisdiction. Further, I do not intend to create an attorney-client relationship with any listener.

Today I will discuss an unfortunate practical side of civil litigation: collecting on judgments. Chris from Boston wrote:

My aunt successfully sued a contractor who collected a lot of money but never completed the work. She never got a dime back from him. I've heard this is not uncommon. What options do people have to collect on a court ordered judgment?

Winning a lawsuit is often only half the battle, and some successful lawsuits can end in nothing more than a big fat bill for attorney’s fees. This phenomenon can be the single most frustrating thing for a litigant to face, and a very difficult concept to explain to clients.

Any civil dispute begins with one party harming the other by committing a tort, breaching a contract, etc. The person who was harmed can file a lawsuit in the trial court that has jurisdiction over the dispute, and that person is the plaintiff. The defendants are the people or entities that are allegedly responsible for the harm. If the parties cannot settle, then the matter goes to trial during which a jury or a judge determines who did what wrong, and to what extent. After that finding is made, the court will enter a judgment. A judgment is nothing more than a piece of paper that says “judgment” on the top, and indicates what the responsibilities of the various parties are after the trial. In a construction matter, the judgment might indicate that the contractor is responsible to pay $25,000 to the homeowner for the harm that the contractor caused. After the judgment is entered, the party to whom money is owed under the judgment is known as a judgment creditor, and the person who owes the money is called the judgment debtor. A plaintiff can enforce a judgment for about10 years, depending on the state, after it is entered.

But, simply because a judgment is entered does not mean that the money will simply appear in the plaintiff’s bank account. The plaintiff/judgment creditor must then enforce the judgment; the court will not do so on its own. Once a judgment is entered, then interest accrues on the judgment, the rate of which is set by statute. The interest rate varies from state to state, and is usually between 5 and 10 percent.

At this point, some attorneys who handled the original construction case might refer the case to another attorney who specializes in enforcing judgments because some of the procedures for collecting are rather specialized. But, some attorneys will handle their own enforcement actions.

There are several steps that a plaintiff can take to collect. The most basic is a judgment lien, which is a legal claim against property owned by the defendant. Once a lien is placed upon property and recorded, then the property cannot be sold until all the liens are cleared up. If the property gets foreclosed upon, then the people with recorded judgment liens will be paid from the proceeds of sale first.

Similar to a lien is a writ of execution, or simply, execution. Depending on the circumstances, the court might have the power to order a sheriff to physically take the defendant’s property, sell it, and give the proceeds to the plaintiff. So, the plaintiff might execute a writ against the contractor’s truck to obtain the money necessary. The plaintiff cannot usually get the property itself, but must wait for the government to auction it and then take the proceeds.

Alternatively, a court might freeze the defendant’s bank accounts and eventually order the bank to turn over the funds in the account to the plaintiff.

Another possibility is to garnish the defendant’s income. This is not available in all cases, and sometimes only the government can do so. The basic idea is that the court will take away some portion of the defendant’s income to go towards satisfying the judgment, and will continue to do so until the judgment is paid off. A defendant usually wants to avoid this because he is paying interest the entire time.

But, there are several problems with all of these procedures. The first is that the average person must hire a lawyer to navigate the complex requirements for these procedures, and that drains money from the judgment you already acquired.

Also, the defendant who realizes that he is going to have a judgment entered against him will likely do anything in his power to hide his assets. He might give them away or sell them at ridiculous prices to friends or relatives who will hold the property for the defendant. He might move assets out of state or out of the country, throwing another wrench into the collection process. These types of transfers, done for the purpose of defeating a plaintiff’s ability to collect, are generally considered fraudulent. But proving where the money went and determining how to get it back after the fact can be nearly impossible. Last, a defendant might file for bankruptcy, which has very broad and complicated ramifications.

It has been said that you cannot get blood out of a turnip, and this maxim is unfortunately the cold reality for people who successfully win lawsuits. One of the pre-lawsuit considerations for most plaintiffs is where the money will come from even if the case is successful.

A personal example: I was injured in a bike accident last year, and had about $100,000 in damages stemming from the surgery, physical therapy and lost wages. Unfortunately, the person who caused the accident was a 20-year-old illegal alien with no money, no education, and no job prospects. I did not sue in the end because it would not have been worth the trouble. This is the sad reality of the civil justice system – had a rich heiress harmed me, I would be richer today.

As you can see, winning a lawsuit is only half the battle, and the collection portion of the case can be worse than the case itself. My tip: always bring up with your attorney the possibility that you cannot collect, and have your attorney investigate into the asset pool of the defendants before starting a lawsuit.

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