Money judgments issued in civil courts around the country remain forever uncollected for a variety of reasons. One such reason is the simple fact that judgment creditors do not understand the lifespan of the court order entered in their favor. Here’s a clue to why so many creditors struggle: judgments do not last forever.
A judgment has a limited lifespan, or shelf life, if you will. In the end, it boils down to the statute of limitations in the state in which the judgment was rendered. A statute of limitations dictates how much time a judgment creditor has to collect.
Statutes of Limitation Vary
Judgment Collectors is a Salt Lake City-based collection agency that specializes in money judgment cases. They explain that the statute of limitations in Utah is typically 8 years. But statutes vary from one state to the next. On average, they run for 7-10 years.
But so many judgment creditors don’t understand is that once a statute of limitations has been reached, that’s it. A judgment expires unless the creditor takes the necessary steps to prevent it. Letting a judgment expire means giving up the legal right to collect whatever is still owed.
While the Judgment Remains Active
Expiration represents the termination of a money judgment’s lifespan. But what about the entire time the judgment remains active? There are certain milestones to pay attention to. The first is the point at which collection efforts can begin in earnest.
Although there are exceptions to the rule, most states prohibit collection immediately following the end of a civil trial. Judgment creditors must typically wait a certain amount of time (usually 30 days) to give debtors time to appeal. Once that amount of time is passed, it is game on for a creditor.
The next milestone is receiving critical information about the debtor’s income and assets. In a perfect world, debtors would willingly furnish the information in a timely and truthful manner. Creditors would have the information in their hands within a few weeks’ time.
Unfortunately, things rarely work out so smoothly. Creditors often need to jump through hoops to get the information they need. It’s information they analyze before deciding on an appropriate course of action.
Devising a Collection Strategy
A solid collection strategy marks the next milestone in the lifespan of a money judgment. A judgment creditor works with their attorney or collection agency to come up with the best possible avenues for recovery. There is a range of options, including:
- Wage garnishment
- Bank account levees
- Judgment liens on nonexempt property
- Writs of execution on nonexempt property
- Interception of business assets, accounts receivables, etc.
The availability and accuracy of debtor-provided information directly affects how long it takes to come up with a collection strategy. In the event that a debtor is uncooperative, things might be delayed while the creditor or collection agency conducts a thorough asset search.
Time Passes Very Quickly
Although there are a few more milestones in the lifespan of a money judgment, a more important point to remember is that time passes very quickly when you’re trying to collect. There are all sorts of deadlines and delays built into the system. And if a judgment creditor isn’t careful, the years could slip away with no meaningful progress.
Fortunately, most states allow judgment renewal. But that should never be an invitation not to get to work right away. The sooner a judgment creditor can collect, the more likely he is to recover every penny owed to him. The longer collection takes, the less likely he will get paid at all.