Creditors in money judgment cases look at assets as valuable tools for collection. Certain types of assets are subject to property liens and writs of execution. These two legal tools have different applications but a similar goal: forcing payment from the judgment debtor.
A Word About Judgments
A judgment is a decision rendered in civil court. Not all judgments include monetary awards. When they do, such judgments are often referred to as money judgments. These money judgments are where property liens and writs of execution come into play.
Salt Lake City-based Judgment Collectors explains that property liens and rids of execution are just two of the options available to judgment creditors. Judgment collection cases do not necessarily have to go as far as exercising liens and writs of execution, but they often do.
The Judgment Lien
A judgment lien is a property lien not dissimilar to other types of liens used to collect debts. It is attached to nonexempt property to establish the judgment creditor’s financial interests in said property. Practically speaking, a judgment lien prevents a debtor from selling, refinancing, or otherwise transferring the attached property without satisfying the debt.
A judgment lien does not automatically give a creditor the legal right to seize and sell the property. By contrast, the lien your mortgage lender placed on your home does give that institution the right to foreclose on you in the event of default. So it’s a different situation there.
In money judgment cases, property liens are considered a passive means of enforcement. The attached property remains in the possession of the debtor. But the debtor cannot really do anything with the property until he pays what he owes.
The Writ of Execution
The writ of execution, on the other hand, is considered an active means of enforcement. A writ of execution can only be obtained against nonexempt property after a money judgment has been entered and recorded by the county clerk. What does the writ of execution accomplish? It allows a judgment creditor to seize and sell attached property.
A good example would be an RV. Most states do not exempt RVs from writs of execution. So if a judgment debtor failed to pay his debt, the creditor could go to court requesting a writ of execution against the vehicle.
Once granted, the writ would instruct the local sheriff to seize the RV and sell it at auction. Proceeds from the sale would go toward paying the judgment. Writs of execution can be obtained against all sorts of nonexempt property including real estate, business assets, jewelry in collectibles, etc.
Other Means of Collecting a Judgment
Writs of execution are normally seen as a collection option of last resort. It’s pretty harsh to seize someone’s property and sell it. Property liens are not as harsh, but they typically are not the first line of payment creditors seek. According to Judgment Collectors, it’s more common for creditors to look at three things before considering liens and writs of execution:
- Lump Sums – The debtor agrees to pay a lump sum amount in exchange for the creditor accepting less than the full amount.
- Installments – The creditor agrees to accept monthly installments until the debt is paid in full.
- Garnishment – The creditor garnishes the debtor’s wages, bank accounts, or both.
If neither of these three options satisfies the debt, creditors can always look at property liens and writs of execution. Both tools tend to be very persuasive when debtors have valuable assets they don’t want to jeopardize. In the absence of such assets, the tools have very little value.
