Property liens and writs of execution are common tools utilized by judgment creditors to enforce money judgments. They are distinct and different tools with their pros and cons. They also aren’t the only tools judgment creditors have at their disposal.
Anyone looking to win a money judgment against another party would do well to understand the enforcement process ahead of time. It has been said that winning a civil lawsuit is easier than actually enforcing it. A party unwilling to go to great lengths to enforce might want to rethink going to court to begin with.
Money Judgments: The Basic Premise
A money judgment is essentially a financial award through which a court intends one party to make restitution to the other. Take a typical debt collection case. A company, we’ll say a utility provider, takes a customer to court over an unpaid bill. The company is the plaintiff while the customer is the defendant.
Assuming the plaintiff wins its case, the court will award an amount equal to the unpaid bill plus any interest, late fees, and court costs. The defendant, now a judgment creditor, is obligated to pay that amount. That is where enforcement comes in. Enforcement is essentially collection. It is up to the judgment creditor (the plaintiff) and debtor to work something up.
The Property Lien
The best option after the court case is for the judgment debtor to pay what he owes – either immediately or through an amicable payment plan. When neither option occurs, judgment creditors need to look for other ways to collect. Proper liens are an option.
Known as judgment liens in some states, property liens are legal attachments to personal property. For example, financing the purchase of a new car will result in a lien being placed on that car until the loan has been fully repaid. The lien prevents the owner of the car from selling or otherwise transferring it without satisfying the long.
Judgment liens work the same way. When a lien is attached to a debtor’s personal property, the creditor has a legally recognized financial interest in that property. Liens are an effective way to encourage payment inasmuch as most consumers do not like having their property attached.
The Writ of Execution
While judgment liens can be issued by county clerks with basic paperwork, a writ of execution requires further court action. A writ of execution is essentially a court order directing the local sheriff or constable to seize and sell named property on behalf of a judgment creditor.
For example, a judgment creditor might ask for writ of execution against a debtor’s vacation property. If granted, the writ would allow seizure and sale of that property to pay the judgment. Just the threat of a creditor obtaining a writ of execution is often sufficient motivation to pay.
Salt Lake City’s Judgment Collectors once worked on a case involving a debtor who claimed to have no assets yet owned an airplane hangar in a neighboring county. Once the collection agency discovered the existence of the hanger, it was in play. Not wanting a lien or writ of execution against the property, the debtor found a way to pay his bill.
Property Is the Key
While liens and writs of execution can be effective tools for enforcing money judgments, property is the key. A debtor must have personal property with significant value. Otherwise, neither tool is that effective.
If you are planning to file a lawsuit, look into judgment liens and writs of execution. You’re going to need to know what they are should you win your case.