Post-Judgment Collection
Basics and Strategies
Basics and Strategies
Which Remedy Should I Choose?
Which Remedy Should I Choose?
• So, the court has entered a judgment in favor of your , j g y client…what now?
• There are multiple remedies available to you (writs of
ti i h t t ) H d d id ?
execution, garnishment, etc.). How do you decide? • Important to pull together strategic information on the
judgment debtor…if not already gathered at the judgment debtor…if not already gathered at the beginning of the case.
– What do we or our client already know about the judgment debtor? – Collectability analysis
– Collectability analysis – Bank search
– Asset search
Information we already have about
th j d
t d bt
the judgment debtor
• First - What information do you have available to you y y already which may be helpful?
– Examples:
• SSN or Federal Employer Identification Numbers
• Home address of other real property of judgment debtor • Bank Accounts - Do we have information on a contract or
maybe a previous check/payment from the judgment debtor? • Do we have information that other parties owe the judgment
debtor money?
Collectability Analysis
Collectability Analysis
• Public records can provide a lot of information about a p judgment debtor and allow us to make an informed
guess on the likelihood of collection • Information available might include:Information available might include:
– Other pending lawsuits or civil judgments – Real property
– Other recorded documents – Other recorded documents – UCC 1 filings
– Tax liens
Collectability Analysis (cont.)
• Upon pulling together the public information, we can review and form an educated opinion as to the
fi i l t t (If th th di it if
financial status. (If there are other pending suits or if there are tax liens, even if now paid off, the
judgment debtor is likely struggling financially)
j g y gg g y)
Bank and Asset Searches
Bank and Asset Searches
• Private Investigators can be used to identify the location g y of bank accounts and/or other physical assets.
• Bank searches include the branch information and the
t tl ithi th t d ill lik l t
amount currently within the account and will likely cost between $250 and $500.
Judgment Debtor’s Examinations
ARS § 12 1631
1636
• Prior to seeking, court must have issued a judgment rather than simply a minute entry.
ARS § 12-1631 – 1636
y
• Two Options:
– Order to appear before a judge or the creditor’s attorney
• Motion and form of order filed with the court setting a time in which the g judgment debtor must appear before the judge/attorney.
• Order must be personally served in Arizona (not on spouse or agent). • In Arizona, the judge swears in debtor and exam takes place outside the
presence of the judge (courthouse hallway, law library, etc.)
• Would recommend including order compelling production of documents as part of debtor’s exam.
F il t i t i t l d t i f i il • Failure to appear, in most circumstances, can lead to issuance of civil
arrest warrant. (need SSN and/or DOB)
• Court cannot require a judgment debtor to appear outside of the county in which he resides
Judgment Debtor’s Examinations
(continued)
– Post-judgment discoveryj g y
• Ariz. R. Civ. P. 69 permits a judgment creditor to obtain discovery from any person, including the
j d t d bt i th di i i f
judgment debtor, using the discovery provisions of the rules including depositions, interrogatories and document production
• Advantage - Lawyer can control the when and where of discovery
Di d t N t d t
Recording the Judgment
Recording the Judgment
• In order to have a judgment lien, (a lien that encumbers j g ( the real property of the judgment debtor) the judgment must be recorded
• Generally, a judgment information statement or someGenerally, a judgment information statement or some
additional document must be recorded with the judgment in order for a judgment lien to exist
Recording the judgment (cont.)
• Generally, prior to the recordation of judgment, we must have i d tifi d f th j d t A i t t
received a certified copy of the judgment. A minute entry does not suffice.
• We want to record in every county in which we have reason to believe the judgment debtor owns real property
believe the judgment debtor owns real property.
• Like most other recorded documents, priority is based upon recordation. Accordingly, we want to record the judgment promptly to establish our client’s priority.
p p y p y
• A failure to comply with the statutory requirements for the
recordation of judgment can lead to a lack of a valid judgment lien.
Wh idi f th j d t t th li t fi d t • When providing a copy of the judgment to the client, find out
whether your office has any approved language with regards to the timing of renewal on the judgment and the obligations of the firm and the client regarding renewal.
Renewal of Judgment
Renewal of Judgment
• In order to remain effective, judgments need to be renewed every 5 years in Arizona.
• The time frame is calculated based upon the date of ENTRY of judgment, not the date of recordation
• It is important to be sure to appropriately docket the timeframe for renewal.
• The renewal process differs by state, but typically requires some sort of affidavit to be filed. This is not something that should be done the day before. Docketing typically starts at least 90 days out from the deadline to ensure sufficient time exists to follow up with client and if requested renew the judgment Arizona exists to follow up with client and, if requested, renew the judgment. Arizona permits renewal anytime prior to 90 days before the expiration of the judgment • Once renewed, the renewal must be timely re-recorded in order to continue to
Writ of Non-Wage Garnishment
ARS 12 1570
ARS 12-1570
• Authorizes the garnishment of monies owed to the judgment g j g debtor by the garnishee which are not earnings.
• Also allows for garnishment of monies held by the garnishee or seizure of personal property owned by judgment debtor or seizure of personal property owned by judgment debtor held by the garnishee.
• Writ is issued by the clerk of the court. The application incl des information regarding the j dgment incl ding the includes information regarding the judgment including the amounts due and owing and the identity of the garnishee.
Writ of Non-Wage Garnishment
ARS 12 1570 (
t )
ARS 12-1570 (cont.)
• If the garnishee is financial institution (bank, savings & g ( , g loan, credit union), the garnishment must be served on the actual branch that the judgment debtor’s account is located
located.
• Once served, the garnishee must hold and not provide to judgment debtor any monies or personal property held, but for any amounts or property that are exempt.
• The garnishee has 10 days after being served with the writ to answer
Writ of Non-Wage Garnishment
ARS 12 1570 (
t )
ARS 12-1570 (cont.)
• The Answer will include the amounts being withheld by g y the garnishee, how much is not being withheld and why and whether the garnishee is aware of other parties who are indebted to judgment debtor or are in possession of are indebted to judgment debtor or are in possession of personal property of the judgment debtor.
• A party who has an objection to the writ of garnishment or the answer has ten days upon receipt of either the writ or the answer.
A hearing on the garnishment shall be commenced within – A hearing on the garnishment shall be commenced within
Writ of Non-Wage Garnishment
ARS 12 1570 (
t )
ARS 12-1570 (cont.)
• If a garnishee fails to answer the served garnishment, g g , you can seek to default the garnishee and seek an entry of judgment for the full amount of the judgment against the garnishee
the garnishee.
• If the garnishee is withholding money or property and there is no garnishment, then you can apply for an entry of judgment against garnishee for the amount withheld. • This is a one time garnishment and does not create a
continuing lien continuing lien.
story-Writ of Wage Garnishment ARS
12-1598
• This writ is used to garnish earnings and create a
1598
g g
continuing lien.
• The process is very similar to the process for the writ of
i h t
non-wage garnishment.
• Upon being served, the writ is a lien on the non-exempt earnings of the judgment debtor and garnishee should earnings of the judgment debtor and garnishee should generally not remit any withheld earnings until an order is entered by the court or if the garnishment lapses.
I t d f l i f j d t i t th i h
• Instead of applying for a judgment against the garnishee, the court will, upon application from the judgment
Writ of Wage Garnishment ARS
12-1598 (
t )
• Starting with the pay period in which the writ was served,
1598 (cont.)
g p y p ,
the garnishee must prepare a nonexempt earnings statement.
Aft th t f th ti i li th i h h ll
• After the entry of the continuing lien, the garnishee shall provide the nonexempt earnings, in addition to the
nonexempt earnings statement per pay period.
• The judgment creditor, so long as the continuing lien is in effect, shall issue a report on the status of the collection effort quarterly
Writ of General Execution ARS
12-1551
t l
1551, et al.
• A general execution is one which commands the officer g to whom it is addressed to collect the amount of the
judgment out of property of the judgment debtor without specifying the particular property
specifying the particular property.
• Issued by the clerk of the court directing the sheriff:
– If the execution is against the property of the judgment debtor, satisfy the judgment, with interest, out of the personal property of the debtor, and if sufficient personal property cannot be found, then out of his real property
– If the judgment is a lien upon real property, then to satisfy the judgment out of the real property
Writ of Special Execution ARS
12-1554
1554
• A special execution sets forth in substance the portions p p of the judgment which command the sale or delivery of specific property and shall require the officer to:
Conduct the sale of specific real or personal property (if the – Conduct the sale of specific real or personal property (if the
judgment calls for it)
– Deliver possession of the property to the party entitled thereto
Satisfaction of Judgment
Satisfaction of Judgment
• At some point, hopefully, your efforts will result in the p , p y, y collection of money on behalf of the client.
• Upon receipt of a payment in full on a judgment, you are
bli d t ti l fil d d ti f ti f
obliged to timely file and record a satisfaction of judgment.
• Depending on partial payments throughout the life of theDepending on partial payments throughout the life of the judgment, you may be obliged to file and record a partial satisfaction of judgment
If you are receiving monthly payments of $200 for 10 month you – If you are receiving monthly payments of $200 for 10 month, you
are probably not obliged
Federal Court Judgments
Federal Court Judgments
• Fed. R. Civ. P. 58 governs entry of judgment in federal g y j g court.
• Under Fed. R. Civ. P. 62, no execution shall issue upon
j d t h ll di b d t k f it
a judgment, nor shall proceedings be undertaken for its enforcement, until the expiration of 10 days after its
entry.
– Whether it be a garnishment or an attempt to seize property, all are called writs of execution post-judgment in federal court
Bankruptcy
Bankruptcy
• If during the course of your post-judgment collection g y p j g efforts you or your client receives notice of
bankruptcy…HOLD ON EVERYTHING and follow up with a bankruptcy lawyer
with a bankruptcy lawyer.
• If things are out for service or are pending, follow up timely to be sure no affirmative action is taken against judgment debtor until you are able to confirm bankruptcy was actually filed and whether or not your intended
action would be in violation of the automatic stay action would be in violation of the automatic stay.
Domestication/Registration of
F
i
J d
t
Foreign Judgments
• What if the judgment debtor has no assets in your state? j g y • What if the judgment was rendered in another state but
the judgment debtor's assets are in your state?
