Many people assume getting a court-ordered judgment against a debtor or defendant will end a nonpayment ordeal. Payment would be automatic, right?
Wrong! The court only makes a determination about whether money is owed and how much—judgment alone does not ensure payment because the debtor may not have the ability to pay or simply refuse to do so. This article looks at what happens when a judgment is granted, the various processes involved, what may be necessary to carry out an order, and how to improve your chances of receiving payment.
Response and Court Action
Once a debtor has been served with a complaint (in person or by mail, depending on the court), he or she must respond or answer in writing within a specific timeframe, usually 20 to 30 days, providing reasons for nonpayment, including any defenses it may have.
After the debtor answers the complaint, the judge will weigh the facts and enter a judgment in favor of either party. “A judgment is a judicial determination as to the rights of the parties,” explains Mark Amendola, a partner at Cleveland, OH-based Martyn & Associates. “It spells out what the defendant owes to the creditor.”
If the debtor does not meet the deadline to answer the complaint, the court enters a default judgment, which decides the case in the plaintiff’s favor and generally awards the amount requested in the petition. The amount of time judgments can be enforced varies by state. Generally, it is 10 years; but the judgment can be renewed if monies owed have not been repaid during the initial period.
All of this sounds like a definite win—but what is a judgment really worth? Some-times, not much or little more than the paper it is written on, because the plaintiff is still dependent on the defendant’s action or lack thereof. “You’re relying on the fact that the other side will obey the court,” confirms Amendola, adding, “It doesn’t always happen.” This does not mean, however, there is no recourse for the plaintiff.
After the Judgment
After a plaintiff has been awarded a judgment, it should be recorded as a public record, which provides the creditor with many more tools to collect the debt compared to someone without a court order.
Assets can include bank accounts, wages, money in a cash register, machinery or equipment of a business entity, as well as real estate, vehicles, stocks, leaseholds, land, insurance policies, jewelry, and other personal property of the debtor.
“There is no limitation to the number of locations you can record a judgment,” Amendola contends, and this includes recording the judgment “as many times and in as many places as you want”—essentially, wherever the debtor has assets. “The first place is where the debtor resides or owns property.”