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Introduction to Judgment Collection Methods

You won your court case and the judge signed an Order stating that the defendant owes you quite a bit of money. The appeals court has dismissed the defendant’s appeal and the whole ordeal with the defendant should be shrinking into little more than a bad memory. Break out that expensive champagne and celebrate victory, because the defendant, now known as the “judgment debtor”, is picking up the tab for the festivities.


Since the abolition of debtor’s prison in 1833, most court orders commanding the payment of money, also known as “money judgments”, are not enforced through the coercive power of the court’s contempt authority. Rather, money judgments are enforced by the plaintiff, now called the “judgment creditor”. The judgment creditor may utilize court processes to collect the judgment, but the court will not on its own initiative collect a judgment for the judgment creditor.

Complicating the situation is that there is no federal law governing the collection of judgments, nor is there a unified database of judgments and collection information. It is therefore no surprise that a May, 2001 article by Arlene Hirsch of the Wall Street Journal’s Startup Journal reported that approximately 80% of money judgments in the United States go uncollected. Collection law constitutes a vast field of legal doctrines arranged in an amalgamation of (sometimes conflicting) state law about which most lawyers know very little. Making matters worse is that most collection proceedings are considered to be in “derogation of the common law”, meaning that the procedural requirements must be strictly adhered to or the proceeding is deemed to be a legal nullity. This concept, in and of itself, is an interesting proposition as the common law method of collecting a debt was to have the judgment debtor sent off to debtor’s prison.

By way of introduction to the topic of legal collections, there are typically four (4) major categories of collection procedures to obtain satisfaction of a judgment: garnishment, debtor interrogatories, actual levy and liens. The purpose of this post is to provide a very general overview of each method. Of course, each method has its own unique benefits and risks, so this post is not meant to constitute legal advice. If you have questions regarding your rights, you should contact an experienced collection attorney.

The lien is probably the easiest collection method to understand, but it is often the least effective and slowest to recover money. Nearly every jurisdiction in the United States has a statute that either by operation of law or through some relatively simple procedures transforms a money judgment into a lien against the real or personal property of the judgment debtor. A creditor can utilize these statutes to collect a judgment from real estate by the following: find real property of the judgment debtor, docket the judgment in the jurisdiction where the property is located and wait until the debtor attempts to sell or refinance the property. Most states require judgment liens to be satisfied out of the proceeds of a sale of real property and the judgment debtor is generally not able to refinance without paying off judgment liens. On the other hand the judgment creditor can be more aggressive and execute on the judgment by selling the real property, but each jurisdiction has procedures that govern how to execute on the judgment against real estate. Liens on personal property work in much the same way, but are not usually as effective as liens on real estate because of the easy transferability of personal property.

The actual levy, in contrast to the lien, is probably the most difficult collection method to successfully pursue. That said, it is sometimes the best (and only) way to recover money. The actual levy is the means used by a judgment creditor to seize the tangible assets of the judgment debtor, including cash. In most states the actual levy is performed by the sheriff, marshal or court security officer at the request of the judgment creditor; the seizure involves the sheriff taking items of personal property belonging to the judgment debtor and selling them in a commercially reasonable manner. Many judgment creditors, after years of squabbling and litigating against a judgment debtor take particular satisfaction in having the sheriff take the judgment debtor’s car, farm equipment or jewelry. In some circumstances, this is a very effective method of satisfying a judgment, particularly if the judgment debtor owns valuable jewelry orshares of stock. Many states, however, require the judgment creditor to post a bond with the sheriff before the sheriff will engage in a levy. The items seized at levy may also be insufficient to satisfy the judgment after sale. Moreover, the procedural requirements for a seizure can be considerable. In many cases, the judgment debtor retains a bit of a trump card over the actual levy through the use of statutory exemptions or bankruptcy. However, if the judgment debtor’s only assets are stock or other tangible personal property or if the judgment debtor maintains a considerable inventory, the actual levy may be the best way to go. Seizure of the cash from a retail establishment, known as a “till tap”, can realize results, and make a statement to the judgment debtor.

Similar to the actual levy, but designed to reach intangible personal property is the garnishment action. Different states have different names for this procedure, but every state has a similar procedure that allows the judgment creditor to intercept assets payable to the judgment debtor by third parties. Customarily this is utilized to seize bank accounts or to intercept wages, but can also be used to intercept rental receipts, contract payments, proceeds from the sale of a business and any other item of intangible personal property. This collection method, like the actual levy, is subject to various statutory exemptions. However, in most states, the garnishment procedure is far more straightforward than the procedure for an actual levy. Moreover, a bond is usually unnecessary.

Debtor Interrogatories are used to determine the location of the assets of the judgment debtor. Some states have statutes authorizing the use of independent debtor interrogatory proceedings where the judgment debtor is put under oath by a judge and required to answer questions about the debtor’s assets, income, expenses and financial situation. If those questions reveal assets, then, in some circumstances, the judge is empowered to order turnover of those assets to the judgment creditor under the pains and penalties of contempt. Other states simply allow the judgment creditor to conduct a deposition of the judgment debtor, but the judgment debtor must determine how to seize such assets. The power of the debtor interrogatories depends in large part upon what is authorized by state statute. In addition to questioning the judgment debtor, the judgment creditor can require the judgment debtor provide financial records, such as bank account and brokerage statements.