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The Ways Creditors Can Collect on Judgements

4 November 2015 No Comment

canstockphoto22472850If you have had a judgement entered against you, you will become known as the judgement debtor, and the creditor becomes known as the judgement creditor.  Once a creditor has received a court judgement, they are entitled to reclaim money owed to them in more ways than they could before the judgement was awarded. If you have found yourself in this situation, below are a few of the ways that a judgement enforcement receiver, such as FedReceiver, will be able to reclaim what is owed.

Property Lien

A popular way for a judgement creditor to collect on debts is through a property lien.  In 50% of the states, the moment a judgement has been awarded, a lien on the property you own will automatically be put into place.  In the other states, the creditor will need to record the judgement with the county before this happens.  What this means is, if you decide to sell your property in order to pay back the debt, a lien will appear, and you’ll need to use the money you receive to pay back the creditor.  This usually applies to property with title papers such as businesses assets and vehicles.

Creditors can also ask sheriffs to execute a lien.  In this case, rather than waiting for you to sell your home, for example, a sheriff would seize your property and arrange a public sale.  The proceeds of this would then be given to the creditor.  This is, however, uncommon.

Wage Attachments

Another way for a judgement creditor to collect what they are owed is through wage attachments.  A creditor can apply to receive up to 25% of your wages (more if you owe child support or IRS taxes).  This is a popular option for debtors who receive a regular paycheck as the collector is guaranteed a set amount of money each month.  Employers will usually remove the money owed and send it directly to the creditors before you even get a chance to see it.

Property Levies

If you have any money in your bank account or have any valuable personal possessions, a judgement creditor may opt to take a property levy.  In the case of the bank account, they will instruct your bank to turn over your money to the creditor.  In the case of personal possessions, a collector can instruct a marshal or sheriff to take your property and sell it at public auction.  The proceeds will then be applied to the debt.

Assignment Orders

Finally, a judgement creditor can also take a look at things like annuities, tax refunds and life insurance policies and take what is called an assignment order.  This is basically a levy, like described above, but on something that isn’t currently available to you.  When your money becomes due it will be sent to the judgement creditor instead of you.

A judgement court order is serious business, and if you default on your payments you could be found in contempt of court.  You could be fined, given community service, or given time in jail.  So make sure to do as much as you possibly can to deliver on your debt.

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