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Obtaining a judgment is often not the end of the case, but just the beginning of post-judgment enforcement proceedings. In the vast majority of court cases in the United States, if a party loses that party will simply pay the judgment, particularly if it is a claim that is covered by insurance. But in a very substantial number of cases, the debtor doesn't pay. What then? The creditor is left holding a judgment and wondering whether it can be monetized.

However, post-judgment enforcement proceedings are often as alien to even highly-experienced litigators as Indian tribal law or proceedings in Admiralty. The post-judgment world has its own vernacular, its own discrete bodies of law, and assumptions made that certain things will pan out like they do pre-judgment are often wrong. Although any attorney holding a valid law license can practice post-judgment, in practice it is very much akin to a specialty area where those experienced in the area can hold a substantial advantage over those who are not.

This website focuses on the processes and techniques that are used to collect on unpaid judgments, based on the personal experience of the author as an attorney who represents both creditors and debtors in post-judgment enforcement proceedings. The statutory exemptions available to debtors and their strategies for minimizing collection are also discussed.

What this website does not generally consider in the post-judgment sector are four areas, which are left to those who regularly specialize in these fields:

  1. Bankruptcy Practice
  2. Consumer Collections
  3. Secured Transactions
  4. Family Law Support Collections

Information on these four topics will have to be obtained elsewhere, although there may of course be some overlap with what is considered herein.

What Is A Judgment Worth?

The value of a judgment is determined by the following formula:

  • The face value of the judgment;
  • Limited by what can be collected from the debtor; and
  • Less the attorney's fees and other costs of collection.

Thus, a creditor may hold a judgment for $10 million against a debtor who is truly penniless; the value of that judgment is zero, or may even be negative if the creditor expends any significant money in a vain attempt to collect. Similarly, a judgment for $25,000 may also be worth nothing, or have a negative value, if the expenses to collect that judgment meet or exceed its value.

The Business Of Judgment Enforcement

Judgments are usually enforced (collected) by attorneys, who can charge by a fixed-hourly rate, on a contingency-fee arrangement, or a "blend" of fixed-hourly and contingency fee. In any event, the creditor is responsible for court costs and other expenses.

Where the collection is on a contingency, the enforcement attorney will usually require that their attorneys lien be "first in line" and have priority over all other liens in the case, meaning that if a trial attorney has their own lien, they will have to subrogate their lien to the lien of the enforcement attorney. Thus, it may be that the enforcement attorney takes 40% "off the top" to collect the judgment, the trial attorney collects their 40% to obtain their judgment (which works out to 24% since it is only against the remaining 60%), and this leaves the client with only a 36% recovery, less costs and expenses.

However, there are persons and businesses who essentially buy judgments (take on assignment) and enforce them, either themselves on a pro per basis or else they hire an attorney to enforce the judgment. In this situation, the assignee-creditor becomes the owner of the judgment and pays all costs and expenses, but has complete control on whether to settle the judgment with the debtor. These assignments are rarely for cash, but instead the assignee-creditor promises to split whatever is collected with the assignor-plaintiff. Typical splits are 50%.

Why so much? It is because judgments are difficult to collect and recovery is never certain. It might be said that 95% of a judgment enforcement business is in the selection of the judgment to take, which is why attorneys who practice in this area on a contingency and those who buy judgments may pass on 19 out of 20 judgments offered to them before they find a judgment that they believe is worth their time and money to pursue.

Enforcement Of Judgment Laws

There is no uniform judgment enforcement law. Rather, every state has its own unique laws, usually known as the "Enforcement of Judgments Law" (EJL) that provides the remedies for creditors to collect on a judgment as well as exemptions available to debtors. Under the Erie Doctrine the federal courts apply the state judgment enforcement laws of the states where the particular U.S. District Court sits. Because judgment enforcement attracts little legislative interest, however, judgment enforcement laws in each state are only vary rarely amended or modernized, which means that these laws frequently go for many decades without significant change and thus become Byzantine compared to other areas of procedural law.

Fundamentally, once a court has entered a judgment, the court itself usually does very little in relation to the judgment. Instead, there is interplay between the court clerk which issues instructions (Writs) to the Sheriff and then the Sheriff follows the instructions to take the debtor's assets into possession. Only if something goes astray, or some remedy requiring the court's approval is sought, will the court take action to enforce the judgment.

The purpose of this website is to describe those remedies, both requiring court approval and not, that are available to judgment creditors.

About The Author

Jay Adkisson is admitted to practice law in Arizona, California, Nevada, Oklahoma and Texas. He graduated from the University of Oklahoma College of Law in 1988 and was a member of the Oklahoma Law Review. Twice an expert witness to the U.S. Senate Finance Committee, Jay is also an honorary member of the California Association of Judgment Professionals and a lifetime member of the National Association of Estate Planners & Councils. His books include The Charging Order Practice Guide (ABA 2019) and Asset Protection: Concepts & Strategies (McGraw-Hill 2004), and Jay is currently the Wealth Preservation commentator to Forbes.com. Jay has also served as an American Bar Association section adviser to the drafting committees of the following uniform acts:

  • Uniform Voidable Transaction Act
  • Uniform Protected Series Act
  • Uniform Registration of Canadian Money Judgments Act
  • Uniform Public Expression Protection Act

Jay's law practice is primarily in the area of creditor-debtor law, and he has served as a court-appointed receiver in two high-profile post-judgment enforcement matters: Gaggero v. Knapp Petersen and Wynn v. Francis. He was also the post-judgment enforcement counsel in Bay Guardian Co. v. New Times Media LLC which involved the collection of a $20+ million judgment against the parent entity of the Village Voice companies. His exploits in that case were later recounted in two articles:

Jay's office is in Las Vegas, but he practices throughout the Southwest United States and often consults with other attorneys on creditor-debtor matters nationwide.

Jay D. Adkisson
Ph: (702) 953-9617
EMail: jay [at] apjuris.com