Anyone who has ever tried to collect a money judgment knows that winning the court case was just the start of a long process. Rare is the case in which a debtor is prepared to pay immediately after having a judgment entered against him. Things just do not work out that way very often. The reality is that collecting judgments is pretty difficult most of the time.
The winner in a money judgment case is known as the judgment creditor. Whether a business or an individual, the creditor has multiple tools at his disposal. His most powerful tool is the writ of execution, especially when it applies to real estate.
An Order to Seize Property
A writ of execution is a court order allowing the judgment creditor to seize nonexempt property for payment. Nonexempt property could be anything from a luxury yacht to a debtor’s valuable collection of rare coins. It could also be real estate.
Collection agencies specializing in judgments love real estate because they can do so much with it. In fact, the power of real estate to convince debtors to pay is truly amazing. Let me give you an example by way of Salt Lake City-based Judgment Collectors.
Judgment Collectors is a judgment collection agency based in Utah and operating in eleven states. They once worked on a case involving a debtor who was purposely avoiding payment. The bank finally gave up and turned the job over to Judgment Collectors.
Not only was Judgment Collectors able to locate the debtor, but they also found a piece of nonexempt real estate through a standard property search. Once the debtor knew that his real estate had been found, he decided he was better off refinancing the property to pay his debt.
A Common Scenario in Judgment Collection
What Judgment Collectors accomplished in that case actually represents a pretty common scenario in the judgment game. Debtors hold out for as long as they can in hopes of wearing down creditors and forcing them to give up. And unfortunately, that is what happens most of the time. It doesn’t happen so often when the creditor turns his judgment over to a collection agency.
Collection agencies do not give up once they get started. If they give up, they don’t get paid. Then all the work they have put into a case ends up being for nothing. To make sure they do get paid, they do everything within their power to locate debtors and their assets.
Creditors Have Several Options
Creditors have a number of options when it comes to real estate. The first option is the one I have already mentioned: a writ of execution to seize and sell nonexempt property. What other options are on the table?
A second option for real estate is the judgment lien. A judgment lien works just like any other type of property lien. Once placed on a targeted property, that property cannot be sold or otherwise disposed of without satisfying the debt.
If personal property is involved in the award, a creditor can obtain a writ of possession. It authorizes the local sheriff to recover the property on behalf of the creditor.
A Good Reason to Get Things Settled Up
The power of real estate to collect judgments lies in the reality that most people are unwilling to part with valuable property over an unpaid debt. If they can find a way to pay and still hold on to their property, they will. That means just the threat of losing a piece of real estate is often sufficient motivation to settle up.