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Vol. 2000-4 | April, 2000

Debt Collection; Judgments

The successful conclusion of a contested collection trial may not always result in actual collection of the debt. Collection of debts after judgment, from the judgment debtor, may require additional legal proceedings by the judgment creditor.

Query: Once a judgment has been rendered against an adverse party, by way of trial or arbitration, how does one go about collecting monies owed, pursuant to the judgment?

Judgment Lien. The first step that may be taken, after a judgment is obtained, is to file a judgment lien with the Clerk of Courts in the county where the judgment was rendered. A judgment lien acts as a charge against, or interest in, all real property owned by the debtor in the county where the judgment lien is filed. The lien acts to secure payment of the judgment debt, by attaching to the assets of the debtor, requiring the debt to be paid upon transfer of the property, or forcing the purchaser of the property to take the property subject to the lien. In the case of real property, once a lien has attached, and payment is not forthcoming, the judgment creditor may initiate a foreclosure action, demanding that the property be sold (liquidated) to secure payment of the judgment, and all court costs, including interest at the legal rate from the date of the original judgment.

Attachment of Assets. Another method of collecting monies owed pursuant to a judgment is to attach assets owned by the debtor. Under this form of collection action all monies held, or being received by the debtor in his or her own name, may be attached and ordered seized by the Court, to be turned over to the judgment creditor.

Debtor Examination. How does one know or learn where the debtor keeps his money and other liquid assets? One way is to conduct a debtor’s examination, requiring the debtor to appear in Court, and to testify concerning employment, income and other assets.

Garnishment of Wages. An additional method of collecting monies owed is to file a garnishment against the debtor’s wages, through the court. The general rule, with certain exceptions, is that up to 25% of the debtor’s disposable (after tax) income can be garnished, to pay judgments.

Conclusion. Although winning at trial can be temporarily satisfying, collection of the monies owed is the real, ultimate goal of debt collection. The law provides, and the creditor should use, with the guidance of legal Counsel, all of the various methods available under law, for collecting money and interest owed on valid judgments.
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Author: J. NORMAN STARK is an Attorney-at-Law, a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior Designer, Planner and Senior Appraiser (ASA), admitted to practice law before the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.), the US Court of Appeals, and the United States Supreme Court. He has had experience in business, Construction, Real Property, Litigation and Construction-Legal Project and Crisis Management.