I have never sued anyone, and never have been sued, so I have a question:
suppose you sue somebody, and the court finds for you. Ypu are awarded a cash judgement, and the other party decides not to pay-what do you do ?
As a practical matter, how do you collect?
I f the other party has no property, and has transferred assets into accounts controlledby others, exactly how do you get your money?
It depends how you file.
I had to sue an attorney I contracted to (I’m a paralegal) for lack of non-payment. I opted to file in Special Civil so that I could have a JUDGMENT against him rather than just an award. That way I could file a Warrant to collect onhis bank accounts. If I can’t collect on his bank accounts, the judgment stays in place until its paid off … if he does any real estate transactions or any other financial transactions, it will show of record and hopefully I’ll be contacted to pay him off.
I do have a warrant now so I’m going to try and garnish his bank accounts, hopefully he still banks at the same bank.
While Eisel answer may be factually accurate, it refers to a very specific situation and would not apply in most states. In general, it is tough to collect on a judgment. First, the judgment must be final, which means that the other guy must have no appeals left (either because he’s lost them all or because the timeto file has passed). Then, you as holder of the judgment must file a second lawsuit to collect on it. This second suit must be filed in a district where the guy holds property, and if that’s in a different state that the original action there is a special process you need to go through to nativise the original judgment to the new jurisdiction.
As long as the original judgment was legally obtained, you’ll win the second suit and the guy will be ordered to pay you. If he doesn’t, various things can happen. The court can order the sheriff to seize his land or personal property, sell them off, and give you the money (up to the amount of your judgment), the court can order his employer to garnish his wages so that you get a cut of every dollar he earns, or the court can (in at least some states) order the guy directly to pay. If he refuses, he can be sent to jail. No, this is not equivalent to debtor’s prison. Debtor’s prison is when the state sends someone to jail because he cannot pay his debts, whereas in this situation a person is only sent to jail if he can pay but refuses to do so.
Short answer – it ain’t easy. However, if the guy against whom you hold a judgment is legally sophisticated and not got his back totally against the wall financially, it’s not unlikely that he’ll pay off the judgment without requiring you to go through these hoops. Once you’ve got the original judgment, except in very, very narrow circumstances it is guaranteed that you’ll win the second suit you bring to execute it, so it isn’t worth his time and effort to try to fight it.
–Cliffy
If you sue for lack of non-payment and win, do you have to give money back?
I have been practicing in this area for more than a dozen years. Cliffy’s answer is mostly correct, but let me take exception with a few points:
A judgment is usually final and collectible as soon as it is entered. In fact, a judgment is not appealable until it is final: a judgment that is not final is known as an “interlocutory” judgment and, with a few limited exceptions, is not appealable. Some jurisdictions require a brief automatic stay after entry of judgment, commonly for 10 days–but not until the right of appeal is exhausted, which usually takes at least 30 days and in some cases as long as 180 days even if the judgment debtor does not exercise that right. See, e.g., Fed. R. App. P. 4(a)(6)(A). A judgment creditor in most cases can collect the judgment, even if the judgment debtor has taken an appeal, unless the judgment debtor posts two bonds: an appeal bond, guaranteeing payment of costs on appeal; and a supersedeas bond, guaranteeing payment of the judgment itself in case the judgment creditor prevails on appeal. For example, the Federal Rules of Appellate Procedure, after which most states also model their appellate rules, cover this topic in Rules 7-8:
A creditor holds a debt owed to him or her by a debtor. When the creditor sues the debtor in order to recover the debt owed, the creditor becomes a plaintiff and the debtor becomes the defendant. If the plaintiff prevails on the claim, then the plaintiff becomes the judgment creditor and the defendant becomes the judgment debtor, and the debt is said to be “reduced to judgment”–so that what the judgment creditor holds is a judgment, not merely a debt.
Executing the judgment does not require a separate lawsuit. The judgment authorizes the issuance of new process, usually known as an execution (or an order for execution or writ of execution), which empowers the sheriff (or, in some cases, the judgment creditor or his or her attorney) to seize assets or other property belonging to the judgment debtor in satisfaction of the judgment.
An additional proceeding (not necessarily a “second lawsuit”) is necessary only if the judgment creditor is seeking assets in a jurisdiction where the court’s writ does not run, in which case the judgment creditor must record the judgment in a court in that jurisdiction. But at least throughout the United States, the Full Faith and Credit Clause requires that “full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state.” So the out-of-state court must likewise honor the judgment, and recording it is mostly a formality.
Most jurisdictions let the judgment creditor levy an execution upon whatever non-exempt assets he or she or the sheriff (who usually relies on the judgment creditor’s information, rather than going out and actively discovering the judgment debtor’s assets) can find, including wages. Technically, garnishing wages is a new lawsuit, since it involves assets–the wages–in the hands of a stranger to the lawsuit between the judgment creditor and the judgment debtor. The judgment creditor must typically serve a garnishment summons upon the garnishee, with notice to the judgment creditor, so that they each enjoy an opportunity for asserting any available legal objection to the garnishment.
A judgment is itself essentially an “order to pay.” As far as I know, there is no jurisdiction in the United States where an unsatisfied judgment by itself can land the judgment debtor in prison. The judgment invokes the power of the state in aid of executing and satisfying the judgment: basically, it says that the state (usually in the person of the sheriff) may forcibly seize assets from the judgment debtor for that purpose, regardless of the judgment debtor’s consent. A judgment debtor may go to jail for forcibly interfering with an execution, or for spiriting assets out of the jurisdiction, but not for nonpayment.
I am not sure what the difference is between not paying and “refusing” to pay, but usually neither one can get you thrown in jail. You either have the resources for satisfying the judgment, in which case the judgment creditor and the sheriff can take them, with or without your cooperation; or you don’t, in which case you are “judgment proof,” and the law can’t touch you.
Following up on Cliffy’s post, it seems that jurisdictions may vary. In California, you don’t generally need the second suit (I have a case currently in collection right now).
Once you have a final judgment, you can request a writ of execution from the same court that granted you judgment. Once you have that, you file said writ with the Sheriff’s Office in any county that you know the subject has assets in (usu. either property or a bank account). The Sheriff, for a fee, can seize assets up to the amount of the judgment, or if non-exempt property (see: homesteads, etc.), the Sheriff can force a sale, and give you the proceeds, up to the amount of the judgment.
I just distilled quite a bit of information down, and there are several smaller steps in there that can trip you up, so I would recommend consulting a local professional for how exactly to do it in your jurisdiction.
And of course: COLOR=red]THIS OPINION is NOT legal advice. It is neither an offer or acceptance of representation. CONSULT COMPETENT LEGAL COUNSEL IN YOUR JURISDICTION BEFORE TAKING ANY LEGAL ACTION. Etc.[/COLOR]
Upon preview, it appears that brianmelendez has posted a significantly more detailed answer on the subject, saying roughly the same thing…
what brianmelendez said.
I would add the following:
In a situation where a debtor transfers his assets to friends, family, whomever, there usually are laws on the books to let the creditor attack the transfers as “fraudulent conveyances.” So if Joe Schmoe owes me $50,000; and in an effort to defeat my claim he gives the contents of his bank account to his brother, John Schmoe, I can likely file a new suit against John seeking to have the transfer “set aside” as a fraudulent conveyance.