If a judgment becomes final, several considerations come into play in deciding how vigorously to pursue collection efforts. First and foremost is the collectibility of the judgment debtor. If the judgment debtor appears to be collectible, one must consider the difficulty of reaching the debtor’s assets. For example, an individual judgment debtor may live in fine style, giving the appearance of collectibility, but his Lincoln may be leased and his home may be owned with his spouse, preventing a judgment creditor of only one married spouse from recovering money by sale of the house. Even if the judgment debtor is not married, or the judgment is against both husband and wife, there is now a good chance the home is underwater, meaning total mortgage debt exceeds its value, or there is so little value in the property as to make sale of the property not worthwhile. A judgment debtor living large on credit cards and deeply in debt is also not a good collection prospect as they generally have no savings and frequently end up in bankruptcy court.
If the decision is made to proceed with collection of the judgment, a judgment creditor has a number of tools available to recover the money owed. The most commonly used are writs of garnishment and writs of execution.
A garnishment is a means of reaching the judgment debtor’s money or property that is held by a third party (the garnishee). In order to garnish money or assets, the judgment creditor prepares a writ of garnishment which is signed by the court. The writ is then delivered to the garnishee believed to be holding the debtor’s assets. Within 14 days, the garnishee must then disclose assets held for the judgment debtor. If the garnishee discloses assets and the judgment debtor does not file a formal objection, the money held is paid to the judgment creditor. This procedure can be very effective if the judgment creditor knows where the judgment debtor banks, has brokerage accounts or where he or she is employed.
Execution is simply the seizure of assets from the judgment debtor. As with a garnishment, a writ is signed by the court directing a sheriff or qualified court officer to seize and sell the judgment debtor’s property to satisfy the judgment. It is important to note that judgments are not in themselves liens on property, so a judgment standing alone does not give a creditor rights in the debtor’s property. Further, the judgment lien permitted under the 2004 revisions to Michigan law is largely a toothless remedy, as the law does not permit foreclosure on the lien, preventing the judgment creditor from selling the assets liened to satisfy the judgment. The writ of execution must first be levied against the judgment debtor’s personal property. If the debtor does not have sufficient personalty to satisfy the judgment, it may then be levied against real estate.
Judgment creditors also have a number of tools to reach assets that a debtor has attempted to hide by improper gifts to friends or relatives, placing assets in other parties’ names, or sales for less than full value. The key to satisfying any judgment is to know the debtor’s finances, to act quickly after the judgment is final, and to be creative and persistent. It will pay off in the end.
If money is owed to you because you have been awarded a judgment in a court of law, you are a judgment creditor. The party against whom the judgment is entered is a judgment debtor. Winning a judgment in a court of law is only half the battle. Obtaining payment under the judgment is the other half. Obtaining payment from a reluctant and determined judgment debtor can turn into a lengthy and costly battle fought over a period of years with an uncertain outcome. A judgment debtor may appeal the judgment or may file bankruptcy, forestalling or preventing efforts to collect on the judgment.