From Judgment to Recovery: Practical Strategies for Enforcing Judgments
Obtaining a judgment is an important milestone in the collections process, but it is not necessarily the end of the road. For creditors, the next challenge is determining how to enforce that judgment and identify opportunities to recover the money owed.
In Episode 13 of our popular What’s on Tap? webinar series, Philadelphia Attorneys Andrew Condiles and Cameron Deane, along with Pittsburgh Attorney Shayna Wolin, discussed practical post-judgment rights and remedies, including how judgments are obtained, how long they remain enforceable, and the tools creditors can use to pursue recovery. The panel also highlighted an important theme throughout the discussion: post-judgment collection strategies can vary significantly by jurisdiction.
Here are some of the key takeaways and questions answered from their episode!
One of the most common misconceptions about the process is related to contracts. A creditor does not necessarily need a traditional, signed paper contract to obtain a judgment. Depending on the circumstances, electronic signatures, contractual terms, and acceptance through performance may establish an agreement. For example, a consumer who accepts and uses a credit card subject to stated terms and conditions may demonstrate acceptance of those terms through performance.
Once a judgment has been obtained, creditors must remain mindful of how long it remains enforceable and what steps are required to keep it alive.
The requirements vary by state. For example, in Pennsylvania, judgments generally have a five-year life and must be renewed within the applicable timeframe. In New Jersey, judgments have a longer period: up to a 20-year window.
The key takeaway is simple: obtaining a judgment is only part of the process. Creditors should monitor expiration dates and take the necessary steps to preserve their enforcement rights.
A judgment may also provide creditors with a lien against a debtor’s real property, depending on a number of factor including jurisdiction. In Pennsylvania, for example, a judgment generally becomes a lien against real property in the county where the judgment is awarded. In New Jersey, there is a different process for making the judgment a lien against any real estate that the debtor owns in the state.
That lien can become particularly valuable when a debtor sells or refinances property. In those situations, the judgment may need to be addressed, potentially giving the creditor an opportunity to collect the judgment balance plus applicable interest.
If a debtor moves, creditors may also have options to domesticate the judgment in another county or state, allowing them to continue pursuing enforcement where the debtor or property is now located.
Although creditors may have the ability to compel the sale of real estate to enforce a judgment,
this strategy comes with significant practical considerations.
A creditor may have to account for superior liens, such as mortgages, that must be satisfied before an inferior judgment lien receives payment. There can also be substantial legal, court and sheriff-related costs associated with the foreclosure process.
For that reason, creditors should evaluate the economics before pursuing a forced sale. A judgment may be enforceable against a property; however, a foreclosure may not result in a significant recovery.
Another post-judgment tool discussed during the episode was the bank attachment, sometimes referred to as a bank levy.
The process varies by jurisdiction, but generally involves obtaining the appropriate court paperwork and serving it on the financial institution holding the debtor’s account. The bank may then freeze available funds, subject to applicable exemptions, and those funds can ultimately be applied toward the judgment.
It’s important to know that bank attachments can be subject to limitations. Certain sources of funds may be exempt, and state-specific exemptions can also protect some if not all of the money in an account. Jointly owned accounts can present additional challenges.
Our attorneys also emphasized the importance of obtaining banking information early. If possible, creditors may benefit from collecting bank information during the credit application or servicing process, rather than trying to obtain it after an account has already defaulted.
Wage garnishment can provide another avenue for judgment recovery, but its availability and limitations depend heavily on the jurisdiction.
If it’s permitted within your jurisdiction, a wage garnishment allows creditors to direct a portion of a debtor’s wages toward satisfying a judgment. In New Jersey, for example, permits certain garnishments subject to statutory limitations. However, in Pennsylvania, there are much narrower circumstances in which ordinary consumer debt can be collected through wage garnishment.
Even when garnishment is available, other judgments or exemptions can affect the final amount received. Employment information can also be difficult to locate, making early collection of employment details another potentially valuable part of the credit and servicing process.
What happens when a debtor has no accessible bank account, no attachable real estate and wages cannot be garnished?
Our What’s On Tap? team stressed that judgment collection is often a marathon, not a sprint. When immediate enforcement options are unavailable, creditors may continue judgment monitoring and maintain communication with the debtor while keeping the judgment active and enforceable.
Remember, circumstances can change over time. A debtor may purchase new property, obtain financing, start a business or otherwise encounter a situation in which an outstanding judgment must be addressed. Maintaining the judgment and monitoring for changes can help creditors preserve future recovery opportunities.
Watch the full What’s On Tap? webinar recording to hear our attorneys discuss post-judgment recovery strategies and guidance. If you have additional questions, you can contact Andrew, Cameron, or Shayna at any time.
This blog is not a solicitation for business and is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
In Episode 13 of our popular What’s on Tap? webinar series, Philadelphia Attorneys Andrew Condiles and Cameron Deane, along with Pittsburgh Attorney Shayna Wolin, discussed practical post-judgment rights and remedies, including how judgments are obtained, how long they remain enforceable, and the tools creditors can use to pursue recovery. The panel also highlighted an important theme throughout the discussion: post-judgment collection strategies can vary significantly by jurisdiction.
Here are some of the key takeaways and questions answered from their episode!
How Does a Creditor Obtain a Judgment?
The process of getting a judgment starts with the filing of a complaint. If the defendant fails to respond, the matter may result in a default judgment. If the defendant answers and contests the allegations, the case may proceed through discovery and ultimately to trial, where a verdict can result in a judgment in the creditor’s favor.One of the most common misconceptions about the process is related to contracts. A creditor does not necessarily need a traditional, signed paper contract to obtain a judgment. Depending on the circumstances, electronic signatures, contractual terms, and acceptance through performance may establish an agreement. For example, a consumer who accepts and uses a credit card subject to stated terms and conditions may demonstrate acceptance of those terms through performance.
Keep Judgments Active and Enforceable
Once a judgment has been obtained, creditors must remain mindful of how long it remains enforceable and what steps are required to keep it alive.The requirements vary by state. For example, in Pennsylvania, judgments generally have a five-year life and must be renewed within the applicable timeframe. In New Jersey, judgments have a longer period: up to a 20-year window.
The key takeaway is simple: obtaining a judgment is only part of the process. Creditors should monitor expiration dates and take the necessary steps to preserve their enforcement rights.
Real Estate Liens Can Create Future Recovery Opportunities
A judgment may also provide creditors with a lien against a debtor’s real property, depending on a number of factor including jurisdiction. In Pennsylvania, for example, a judgment generally becomes a lien against real property in the county where the judgment is awarded. In New Jersey, there is a different process for making the judgment a lien against any real estate that the debtor owns in the state.That lien can become particularly valuable when a debtor sells or refinances property. In those situations, the judgment may need to be addressed, potentially giving the creditor an opportunity to collect the judgment balance plus applicable interest.
If a debtor moves, creditors may also have options to domesticate the judgment in another county or state, allowing them to continue pursuing enforcement where the debtor or property is now located.
Why Foreclosure May Not Always Make Economic Sense
Although creditors may have the ability to compel the sale of real estate to enforce a judgment, this strategy comes with significant practical considerations.
A creditor may have to account for superior liens, such as mortgages, that must be satisfied before an inferior judgment lien receives payment. There can also be substantial legal, court and sheriff-related costs associated with the foreclosure process.
For that reason, creditors should evaluate the economics before pursuing a forced sale. A judgment may be enforceable against a property; however, a foreclosure may not result in a significant recovery.
Bank Attachments Provide a Direct Path to Recovery
Another post-judgment tool discussed during the episode was the bank attachment, sometimes referred to as a bank levy.The process varies by jurisdiction, but generally involves obtaining the appropriate court paperwork and serving it on the financial institution holding the debtor’s account. The bank may then freeze available funds, subject to applicable exemptions, and those funds can ultimately be applied toward the judgment.
It’s important to know that bank attachments can be subject to limitations. Certain sources of funds may be exempt, and state-specific exemptions can also protect some if not all of the money in an account. Jointly owned accounts can present additional challenges.
Our attorneys also emphasized the importance of obtaining banking information early. If possible, creditors may benefit from collecting bank information during the credit application or servicing process, rather than trying to obtain it after an account has already defaulted.
Wage Garnishment Is Highly Dependent on State Law
Wage garnishment can provide another avenue for judgment recovery, but its availability and limitations depend heavily on the jurisdiction.If it’s permitted within your jurisdiction, a wage garnishment allows creditors to direct a portion of a debtor’s wages toward satisfying a judgment. In New Jersey, for example, permits certain garnishments subject to statutory limitations. However, in Pennsylvania, there are much narrower circumstances in which ordinary consumer debt can be collected through wage garnishment.
Even when garnishment is available, other judgments or exemptions can affect the final amount received. Employment information can also be difficult to locate, making early collection of employment details another potentially valuable part of the credit and servicing process.
When Immediate Recovery Isn't Possible, Keep Monitoring the Judgment
What happens when a debtor has no accessible bank account, no attachable real estate and wages cannot be garnished?Our What’s On Tap? team stressed that judgment collection is often a marathon, not a sprint. When immediate enforcement options are unavailable, creditors may continue judgment monitoring and maintain communication with the debtor while keeping the judgment active and enforceable.
Remember, circumstances can change over time. A debtor may purchase new property, obtain financing, start a business or otherwise encounter a situation in which an outstanding judgment must be addressed. Maintaining the judgment and monitoring for changes can help creditors preserve future recovery opportunities.
Watch the Full Webinar for More Recovery Insights
A judgment can be an important recovery tool, but successfully monetizing that judgment requires more than simply obtaining a court order. Creditors need to understand the remedies available in the relevant jurisdiction, keep judgments active, identify assets and employment information when possible, and evaluate the costs and potential recovery associated with each enforcement strategy.Watch the full What’s On Tap? webinar recording to hear our attorneys discuss post-judgment recovery strategies and guidance. If you have additional questions, you can contact Andrew, Cameron, or Shayna at any time.
This blog is not a solicitation for business and is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
