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Judgment Granted—Now What?

How to improve your chances of receiving payment

Amendola notes that in Florida, for example, when a judgment is recorded with the Secretary of State’s office, the debtor can be prevented from starting another company in the state until the judgment is paid. If the debtor resides or has a business in a state other than where the judgment has been granted, the creditor must ‘domesticate’ the judgment—that is, obtain a judgment in the debtor’s state.

Most states, the District of Columbia, and the territory of the U.S. Virgin Islands have enacted the Uniform Enforcement of Foreign Judgments Act (UEFJA). This legislation enables a judgment entered in one state to be enforced in another. Essentially, UEFJA eliminates the need for a plaintiff to start all over with a new lawsuit in another jurisdiction.

Instead, the creditor files the judgment in the county where the debtor resides or has assets, and he or she then has an opportunity to challenge the judgment on procedural grounds within a specified time period (set by the state), during which time the creditor cannot enforce the judgment.

Determining Assets
Having adequate information on the debtor’s finances and assets is an important step in collecting debt. If the creditor cannot locate financial information, believes assets are hidden, or funds are being diverted, an in-depth search may be necessary. Information can be obtained through both informal or formal channels: creditors can conduct a search themselves, hire an investigator or an asset search firm, or more formally, go through the court system for ‘post-judgment discovery’ to locate assets and sources of income.

Post-judgment discovery enables a creditor to make a court-enforceable request for relevant information and documents from the debtor and third parties, such as an employer or financial institution. A creditor can request the debtor be deposed (formally questioned) in person to answer questions about his/her assets. Or the creditor can send a list of questions to the debtor, who must respond within a particular timeframe. A noncompliant debtor can be determined to be in contempt of court and face penalties, including jail time.

Collection Options
With a judgment, the judgment creditor can seek repayment by petitioning the court for various writs and orders that include garnishing bank accounts and wages, placing a lien against owned real estate, and seizing personal property. However, state laws covering enforcement procedures vary.

Bank accounts
Amendola and Stephen DeFalco of Meuers Law Firm in Naples, FL suggest garnishing bank accounts as the best way for creditors to seek repayment. The creditor petitions the court for a writ of garnishment.