Whenever there is a dispute involving money, and the dispute cannot be resolved through any traditional means of collection, our country’s legal system makes it possible for individuals or businesses to bring their dispute before the court to decide who is legally entitled – or not – to compensation. Compensation can be in the form of money, an exchange of property, or an order from the court to do a specific thing – such as an eviction from a rental unit.
People find themselves in court for a variety of different reasons. Unpaid bills, personal loans, tenant evictions, business deals gone bad, uninsured auto accidents – you name it. If it involves money, the matter can be heard in a small claims court, or a higher civil court, and the responsibility for ‘what’ is owed to ‘whom’ will be determined by a judge or commissioner.
A ‘plaintiff’ is the person who is initially filing a lawsuit (a complaint) against someone, requesting a hearing on the matter in court. The ‘defendant’ is the person who is defending against the complaint – or the person who presumably owes money to the plaintiff.
When the court decides in favor of either the plaintiff or defendant it will award a judgment. A judgment declares the court’s decision in the dispute. If the plaintiff wins, the court will usually order the losing party to pay a certain amount of money to the winner, often including filing fees and/or attorney’s fees as well. If the defendant wins they usually don’t have to pay anything and the matter is final.
In some situations, a defendant may have brought a counter-suit against the plaintiff. Occasionally the defendant wins the counter-suit and it’s the plaintiff who ends up owing the money – or, each may owe a different sum to the other, depending on the outcome. It doesn’t always go this way. Roughly two-thirds of all cases that pass through our courts never even make it to the hearing date. These cases are referred to as “dismissed.” Cases are dismissed for a variety of reasons, some of which include: service was never perfected (this means that the defendant was not properly served with papers notifying them of the hearing); the dispute may have been settled out of court; both the plaintiff and defendant didn’t show up for the hearing; or for other reasons. But we’re going to discuss what happens when someone, either the plaintiff or defendant, is awarded a money judgment. The winner of the case, if a dollar amount was awarded, is now referred to as the judgment creditor. If the defendant has won and no dollar amount has been awarded, both parties go on with life as before and there is no judgment creditor. If the defendant has won and has also been awarded a dollar amount, the defendant now becomes the judgment creditor. The judgment creditor is whomever the court has determined is due monetary compensation. The person who has lost the case, and now owes money, is referred to as the judgment debtor (“deh-tor:” the ‘b’ is silent). After the complaint has been heard, a statement of the details of the judge’s decision will be filed in the case file at the court where the judgment was awarded. Another form, called a ‘Notice of Entry of Judgment’ (or something similarly named), which states the court’s decision, and specifies who owes what to whom, will be mailed by the court clerk to all the parties, plaintiff(s)/defendant(s) or any representing attorneys, who were involved. On rare occasions, the judgment debtor will pay the amount ordered and that’s the end of things. If the judgment debtor disagrees with the court’s decision, it may be appealed to let a higher court decide the outcome of the dispute, though generally a plaintiff may not file any appeals.
The judgment debtor typically has 30 days after the judgment has been awarded to either pay, attempt to have the judgment vacated (thrown out for specific and valid reasons), or to file an appeal with a higher court. The likelier scenario (about 80% of the time) is that the judgment debtor ignores the judgment and order to pay completely. This leaves judgment creditors with no other choice but to attempt to enforce their judgment on their own, or hire an attorney to do it for them. Only a small percentage of all attorneys deal with the enforcement of judgments. Further, they usually won’t touch anything under a large dollar amount and require retainer fees up front. Court clerks, although they are as helpful as they can be, are not permitted to give out legal advice to assist the judgment creditor with the enforcement of the judgment, so most judgment holders hit a dead end soon after their judgment has been awarded. Now a very few individuals will be familiar with the enforcement of judgments and may try to enforce the judgment with a writ of execution and a seizure of the judgment debtor’s assets (an ‘asset’ is money, property, wages, etc.). Even fewer of these judgment creditors will know how to locate their judgment debtor’s assets and as a result will have no assets to seize! It’s quite a dilemma for the judgment holder.