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What happens when a creditor files a judgment against you?


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Wiki User
2006-08-17 13:15:51
2006-08-17 13:15:51

The judgment can be executed according to the laws of the debtor's state. The preferred method is wage garnishment or bank account levy. In most cases it is also possible for a judgment creditor to execute the judgment to seize and sell non exempt property belonging to the debtor(s) or place a lien against real property. In very rare instances the judgment creditor can petition the court for a forced sale of a primary residence. That being the case, a homeowner should be aware of the status of the homestead exemption for their state of residency.

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After the creditor wins a lawsuit and has been awarded a judgment against the debtor and then files the judgment as a wage garnishment action.

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Courts do not collect debt owed when it pertains to a civil judgment. In civil cases the judge orders a judgment to be entered against the debtor, the judgment creditor uses the judgment in whatever manner is allowed by law to collect the debt. Example, the creditor receives a judgment in a civil suit, then files the judgment as a wage garnishment against the debtor, the judge signs the garnishment order and the sheriff or other officer of the court serves the garnishment order on the employer of the debtor.

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A civil judgment release is an acknowledgment by the holder of the judgment that it has been paid in full and may now be removed from the public records as a lien. In New Jersey, when a judgment debtor pays the money owed to the judgment creditor, the judgment is said to be satisfied. The creditor is obligated to give the debtor a document called a Warrant of Satisfaction, which is the same as a release of the judgment. The debtor then files that Warrant with the office where the judgment was recorded as a lien. That office marks the judgment satisfied so that it no longer is a lien.

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Normally, when a judgment is paid in full, the judgment creditor gives the debtor the release of judgement (sometimes called a warrant of satisfaction). It is then up to the debtor to file or record it because he/she wants to make sure the lien is removed.

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The person who is owed the debt files a lawsuit against the debtor and if granted a judgment can in most states use it as a wage garnishment to collect money owed. The amount a person's wages can be garnished by a judgment creditor is regulated by state or federal law. Some states do not allow wage garnishment if a judgment can be collected in some other manner, such as a bank account levy or lien against real property belonging to the debtor.


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