The Basics of Judgment Collection: How Long and How to Do It?

When people are sued, you will often hear them say something like “let them sue me, they’ll never collect.” And while that may be true to some extent—some people really have nothing to collect—the question isn’t really what can be collected—it’s how long a judgment creditor has to collect on the judgment.

How Long to Collect?

The answer is a long time—up to 20 years to collect a judgment. But that’s just the start of the time period to collect a judgment, because a judgment creditor (that is, someone who has obtained a judgment, and who is owed money under that judgment) has the ability to renew the judgment for even more time.

The time matters—not just because it means that the creditor has an excess amount of time to collect the judgment, but also because in that very long period of time, a debtor’s financial situation could change for the better.

A debtor who has nothing or who has only exempt assets now, may have a lot more for the creditor to collect in 5, 10 or 20 years—and the judgment creditor can continue to do discovery, to see what the debtor has, over the course of those 20+ years.

Getting a Writ on Property and Other Assets

During discovery, the creditor may learn of property that is owned by the debtor, property which may not be protected by applicable exemptions. Once identified, the creditor can apply for a writ of execution to have the property seized to satisfy the judgment.

The creditor also has other means of collision, like garnishing bank accounts or wage garnishments with the debtor’s employer, whereby the employer is legally bound to withhold a portion of the debtor’s paycheck.

Again, many of these methods are restricted by exemptions, which some debtors will have, but others will not, and most commercial creditors do not qualify for exemptions such as head of household, or the homestead exemption, which requires that an actual human person be the owner of the property.

Attaching Property

Creditors can also attach the judgment to real property—although they cannot foreclose a typical unsecured judgment, and cannot attach the judgment to homestead property. So long as the debtor has an intent to use the property as a homestead, courts will consider the property to be protected homestead property.

The judgment holder doesn’t even need to know of, or specifically identify, the property owned by the debtor. Just recording the judgment will serve as an attachment to any real property the debtor may own. The judgment would need to be recorded in every Florida county to be valid in those counties, however, although most major creditors know how to do that.

Liens on property last 10 years, although that 10 year period can also be renewed by the creditor. However, liens on property that arise from a judgment, have a maximum lifespan of 20 years.

Do you have a business collection problem? Call the West Palm Beach commercial litigation attorneys at Pike & Lustig today.

Sources:

floridabar.org/public/consumer/tip006/

floridabar.org/the-florida-bar-journal/florida-exemptions-and-how-the-same-may-be-lost/