Winning a civil judgment against another party results in two things: a legal document verifying a plaintiff’s victory and the court’s decision officially entered into the county, state, or federal record. But those two things alone are not of much value by themselves, especially if a judgment includes a monetary award. In order to begin collecting that award, a judgment creditor must perfect the judgment.
‘Perfecting’ a judgment amounts to taking specific administrative and legal steps to make the monetary award collectible. Bear in mind that judgments are assets under the law. But they only become assets after the piece of paper representing a judgment is perfected. Perfection takes place when recognized collection efforts begin in earnest.
3 Examples of Perfecting a Judgment
Another way of looking at judgment perfection is establishing a financial interest in the debtor’s wages, cash assets, property, etc. Once that financial interest is recorded by the court, the creditor is no longer dealing with just a piece of paper. He now has a court recognized debt which the law considers an asset.
There are different ways to perfect a judgment depending on how a creditor chooses to proceed. Here are just three examples:
1. Wage Garnishment
Wage garnishment is the practice of seizing a certain amount of a debtor’s disposable income for payment of a debt. A judgment creditor cannot garnish on his own. He must go to the court and ask for a writ of garnishment. Once issued, the writ establishes the existence of the debt and makes it collectible.
The writ is then passed off to the local sheriff, who serves it to the debtor’s employer. From that point forward, the employer is compelled to withhold a certain amount from the debtor’s paychecks and forwarded to the creditor or his representative’s.
2. Filing Liens Against Property
A judgment can be perfected by filing one or more liens against a debtor’s personal property. For example, a creditor could obtain and Abstract of Judgment and file it with the county clerk to establish a judgment lien against debtor-owned real estate.
A judgment creditor could also file a Judgment Lien Certificate against personal property like cars, equipment, and business assets. In both cases, the liens establish the validity of the debt. They empower the creditor to collect on that debt.
3. Writs of Execution
In extreme cases, a lien could be perfected by asking the court for one or more writs of execution. A writ of execution is a court order allowing the local sheriff to seize and sell targeted property. Sale proceeds go to pay the debtor’s judgment. Writs of execution are generally reserved for high-value assets.
Just as with the other two methods, pursuing writs of execution transforms the court’s piece of paper into a tangible asset. A writ of execution establishes a financial interest in the debtor’s property, thereby making the debt collectible.
Why Perfecting a Judgment Matters
Salt Lake City’s Judgment Collectors, a specialist Utah collection agency with a focus on money judgments, says perfecting a judgment as soon as possible is important. It matters because a creditor might find himself competing with others for limited debtor resources. The more quickly the creditor perfects, the higher up the ladder he is in terms of payment.
Waiting too long to perfect a judgment could ruin a creditor’s chances of collecting a substantial amount. So it doesn’t pay to wait. The smart judgment creditor begins collection efforts as soon as allowed by law. He takes the necessary steps to perfect the judgment and then quickly moves on from there.