2 December 2014
After a judgment is entered, the next document to issue is
called an execution. The execution is
what empowers the sheriff’s office, as it is directed by the creditor, to
collect from you. Depending on the
circumstances and the court the case is in, an execution is to be issued by the
clerk’s office either 10 or 30 days after judgment. However, speaking from experience, some
clerk’s offices may not be up to date and it could take much longer for it to
actually issue the execution to the creditor.
With an execution, a creditor has many avenues from which
to collect. Such as levy on personal
property, levy on real estate, wage attachment, keeper attachment, receivership,
and what is known as supplementary process.
With respect to wage attachment, keeper attachment, and receivership,
they require a separate suit after judgment has issued. If the case was originally in small claims, a
“payment review” hearing may occur prior to the creditor obtaining an
execution.
One popular way in which a creditor collects is by levy
(and suspend) on real estate. What
happens is that the creditor instructs the sheriff to levy and suspend further
action on your real estate, usually your residence. The execution is recorded at the registry of
deeds and acts essentially as an attachment of your house. The good news is that there is nothing
forcing you to pay immediately, the bad news is that you cannot transfer title
to the house without satisfying the execution and it accrues interest.
The most popular avenue that creditors use is supplementary
process. It is formally a separate
action ($40 filing fee) but only requires a simple form to be completed. It is either handled by the small claims
division or the district court division of the court. You will get served by a sheriff with a
summons under this new supplementary process case to appear at court. If you do not appear, the creditor can
request, and most likely will obtain, a capias warrant for your arrest. Then the creditor has two options, either
have the sheriff physically arrest you, or get the debtor to promise to appear
at another court date, and it is usually the latter.
If you do appear at the supplementary process hearing, you
will have to answer as to your ability to pay.
The clerk or judge, sometimes with the creditor’s assistance, evaluate
whether you have non-exempt assets or non-exempt income to pay the judgment. Most debtors avoid this evaluation though as
they make an agreement with the creditor at that hearing but prior to that
evaluation to pay a certain amount a month.
That agreement actually is a court order for you to pay, and if you do
not, you could be found in contempt. As
an aside, if you find yourself unable to pay, be proactive and contact an
attorney before they find you in contempt.
If the clerk or judge does find that you do not have any
non-exempt assets from which to collect, the case may be dismissed or scheduled
for payment review within a certain period of time such as 6 months or a
year. When someone is found to not have
assets or income available to pay, that is what is referred to as “judgment
proof.”
Generally, the supplementary process session is not a happy
place to be and for the most part, it is the end of the line. The most important mistake people make is
arguing the merits of the original case, which is common and will likely be
quickly rebuked as it is not the place or the time to do so.
It is also a place that you are playing with fire if you
decide to not make a deal with the creditor and most people are on unfamiliar
turf. So, it is best to have an attorney
by your side if you are entering the lion’s den.
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