What is a judgment creditor?

A judgment creditor is the party a money judgment is issued to and is entitled to enforcement of the judgment through liens, execution and levy. Simply put, the judgment creditor is the person who receives the money in a judgment ruling. During the trial, they are called the ‘plaintiff’ although judgments such as attorney’s fees may also be owed to the plaintiff’s attorney.

What Is a Judgment?

A judgment is a ruling by any state or federal court ordering money to be paid to another party. A judgment is binding and enforceable by the court that the ruling came from. If a judgment is not paid, a lien can be placed on the person’s property until the debt is satisfied.

A judgment creditor is given great leeway in how the judgment money is actually collected. Typical actions include placing a lien on property that will have to be paid when it is sold, removing a small amount each month from the debtor’s paycheck, and placing an order of payment on any trust funds the debtor receives.If a trust has a spend-thrift provision, then judgment creditors cannot access the trust funds for repayment. However, the judgment creditor can still garnish any trust payments as they are released. If the debtor declares certain types of bankruptcy, then the judgement creditor is limited in their remedy to whatever is obtained from the property and assets upon sale.

How a Judgment Creditor Collects Their Money

All judgment creditors go through the court system for payment. The process of using a debtor’s property and money to satisfy a judgment is called execution. Execution is handled directly through the court so that the judgment creditor does not have to deal directly with the debtor.

Can a Debtor Avoid Paying a Judgment Creditor?

Judgments are unsecured debt, so all payments must come once an asset is liquidated. The court will, however, place a lien on all property making it difficult to sell. This is because whoever the property is transferred to is still responsible for the debt and will be sued by the judgment creditor for payment.

Case Studies: Judgment Creditors and Enforcement Strategies

Case Study 1: The Lien on the Property

John, the plaintiff, successfully obtained a judgment against his former business partner, Mike, for unpaid debts. As a judgment creditor, John had the right to enforce the court’s ruling and collect the money owed to him. To secure the debt, John placed a lien on Mike’s property, preventing him from selling it without settling the outstanding judgment first.

Despite the lien, Mike refused to pay the debt voluntarily, prompting John to proceed with execution through the court system. This case study explores the process of placing and enforcing a lien on a debtor’s property.

Case Study 2: Garnishing Wages and Trust Payments

Lisa, a judgment creditor, was awarded a substantial amount in a court judgment against her former employer for unpaid wages. As a result, the court allowed Lisa to garnish a portion of her former employer’s paycheck every month until the judgment debt was satisfied.

Additionally, her employer was entitled to receive trust payments, but Lisa was able to garnish those payments as they were released. This case study delves into the different methods a judgment creditor can use to collect money from a debtor’s income and trust funds.

Case Study 3: Debtor’s Attempt to Avoid Payment

This explores the actions of a debtor, Mark, who tried to evade paying his judgment creditor, Sarah. After losing a lawsuit and being ordered to pay Sarah a significant amount, Mark attempted to transfer his property to his family members to avoid the debt.

However, the court stepped in and placed liens on all the properties transferred, making it challenging for Mark’s family to sell them without settling the debt owed to Sarah. The case study highlights the challenges faced by judgment creditors when debtors attempt to avoid payment.