How Do I Collect My Money Judgment?

You may be considering suing someone. You know you have been wronged, and you believe there is enough evidence to prove it. However, you’re concerned that – even if you win – the person you are suing won’t be able to pay the judgment. This could be for any number of reasons. Maybe the defendant doesn’t own any valuable property or has a failing business. Perhaps the defendant is just “shady,” causing you concern they will try to hide assets. You’re starting to ask yourself whether it’s worth pursuing them in this lawsuit if you may never be able to get them to pay up at the end of the road. Before you decide to throw in the towel, you should be aware of the various legal mechanisms available to secure your judgment from parties who may be unwilling to pay.

LEGAL MECHANISMS AVAILABLE TO COLLECT MONEY OWED ON A CIVIL JUDGMENT

In Colorado, there are three primary methods for collecting civil judgments (i.e., money awards given by either a jury or judge at trial). They are the Writ of Execution, the Writ of Garnishment, and the Writ of Attachment.

In its simplest form, a “writ” is essentially a short court document of only a few pages in length that calculates the amount of money the person who you won against in court still owes you combined with a demand that the person’s property, money, land, or wages be taken or “seized” and used to pay your judgment. Obviously, the person who has failed to pay you is not going to want their property, wages, or assets taken away, so a writ ultimately relies on the power of law enforcement to facilitate the seizure of whatever you are attempting to take.  Writs often direct the local sheriff’s department to send deputies out to the non-paying person’s home or business and take possession of certain property by force. If the non-paying person resists, he or she is subject to arrest for interfering with a deputy’s lawful duties.

Which of the three types of writs you should use depends on exactly what you are trying to take from the non-paying person (referred to as a “judgment debtor”) and when you are trying to take hold of it. Regardless of which writ is used, the end goals are always the same. First, any seized physical property is sold at public auction by the sheriff’s department and the money paid to you in your role as the “judgment creditor” (i.e., the person who won at trial but hasn’t been paid). Second, any seized money, such as wages that have been garnished, bank account balances, etc., is paid either directly to you or to the court, which will then pay it to you after-the-fact.

THE WRIT OF EXECUTION

Along with the writ of garnishment, the writ of execution is the primary mechanism for enforcing monetary judgments against a judgment debtor who simply will not pay what you’re owed. The writ of execution directs the sheriff to seize property in the actual physical possession of the judgment debtor. For property that cannot be picked up and transported to the sheriff’s department storage facility until a public auction is held (i.e., land and buildings), the writ of execution directs the sheriff to file a notice in the public records of the local clerk and recorder’s office. That notice clouds title to the property and makes it difficult or impossible for the judgment debtor to sell the property in the interim between the notice being filed and the sheriff department’s public auction of that property. Once the property is sold at auction, the sheriff’s department turns the proceeds over to you, up to the point at which your monetary award is paid in full. Any remaining funds above the amount you are owed get returned to the judgment debtor who formerly owned the property before the auction. If the auction does not generate enough money to pay your monetary award in full, you can use another writ of execution to seize additional property or try a writ of garnishment.

THE WRIT OF GARNISHMENT

The writ of garnishment directs the judgment debtor’s employer to (a) identify how much money it is paying the judgment debtor each pay period, (b) calculate how much of that money is subject to garnishment, and (c) pay that money to either the judgment creditor, if there is no objection, or to the court clerk, if the judgment debtor objects to the calculated amount. If there is an objection by the judgment debtor, the court will set a hearing to re-calculate the amount of money that should be deducted out of each pay period. At the end of the hearing, the judge will direct the court’s clerk to pay whatever the judgment creditor is entitled to receive directly to the judgment creditor and return the excess (if any) to the judgment debtor.

A writ of garnishment must be periodically re-sent to the judgment debtor’s employer in order to keep it active. If a former spouse/partner is also attempting to garnish the judgment debtor’s wages for child support at the same time you are trying to garnish those same wages, then the writ of garnishment for child support automatically takes priority under the law and your writ of garnishment to collect a civil judgment will be put on hold indefinitely until the child support payments are caught up. This is because the legislature has determined that getting money for a child’s care and support takes priority over other debts owed by the judgment debtor.

Although not as common, a writ of garnishment can also be used to seize property that a third-party is holding on behalf of the judgment debtor or to direct the payment of any debts that third-party owes the judgment debtor directly to you instead of the judgment debtor. For example, if the judgment debtor loans a car to an uncle in an attempt to stop you from seizing it under a writ of execution, you may be able to use a writ of garnishment to order that uncle to turn the car over to the sheriff’s department. Another example would be if Business X owes the judgment debtor $10,000 from some sort of business deal and you find out about it, you could potentially use a writ of garnishment to direct that Business X pay that $10,000 directly to you instead of to the judgment debtor.

THE WRIT OF ATTACHMENT

Unlike the other two writs previously discussed, a writ of attachment is an order directing the sheriff’s department to seize property or land before you even win at trial. This pre-judgment writ essentially directs the sheriff’s department to hold the property taken from the person you’re suing until the end of the case. If you win at trial, the property is auctioned and proceeds distributed just like they would have been if the property was seized after trial under the writ of execution or writ of garnishment. If you lose at trial, the property is returned to the person you’re suing and you get nothing.

Writs of attachment are powerful means of keeping a person you’re suing from disposing of their property before trial, but such a powerful tool can only be used under narrow circumstances and carries a large financial risk for the person requesting it. As relevant to the narrow circumstances for requesting a writ of attachment, the legislature has identified a list of very specific reasons why a court may grant a writ of attachment. Nearly all of these reasons involve showing some kind of proof that the person you’re suing is either fleeing from the State of Colorado or moving their property out of Colorado so that you will not be able to use a standard writ of execution or writ of garnishment after trial. If you cannot show that one of the narrow reasons under the law applies, a judge cannot issue a writ of attachment. With respect to the large financial risk you assume by asking for a writ of execution, the court can only issue the writ of attachment if you first agree to post a bond with the court that covers the full value of the property that will be seized before trial and perhaps even as much as two times that value. Should you lose at trial or the judge eventually decide that the writ of attachment never should have been issued at some point before trial (i.e., the person you’re suing convinces the judge that there was no improper attempt to evade the court or move property out of state), the bond will be used to pay any damages the defendant sustained by being deprived of the property for a time. Depending on the type of property and what the defendant could have used that property to do while it was locked up by the sheriff’s department, those damages could be substantial.

EXEMPT PROPERTY

An important point to note about all writs is that they cannot be used against all types of property and can only be used to give you some of the money from the auction of other types of property.

The property that cannot be seized at all under a writ of execution is called “exempt” property. These are the categories of things and monetary payments that the Colorado legislature has determined to be so vital to a citizen’s wellbeing and our society’s welfare that judgment creditors cannot use any kind of writ to seize the property, regardless of how long the judgment creditor has been left unpaid or how many other attempts have been made to seize non-exempt property from the judgment debtor. There is a list of property types that are fully exempt, including items such as court ordered child support payments to the judgment debtor and any life insurance benefits the judgment debtor may collect upon the death of a family member. There is also a very extensive list of property types that are partially exempt, meaning that they can potentially be seized and sold at auction but the judgment debtor is always entitled to get a certain dollar value from that sale back before any remaining amount is paid out to the judgment creditor who is owed a monetary judgment from court. For example, Colorado law currently permits a judgment debtor’s “watches, jewelry, and articles of adornment” to be seized, but the first $2,500 of sale proceeds must be returned to the judgment debtor. The exemption amounts for each particular type of property vary significantly. The largest exemption is the homestead exemption, which requires that the first $250,000 of proceeds from the sale of the judgment debtor’s home (or $350,000 if the judgment debtor or certain close family members are elderly or disabled) must be returned to the judgment debtor before the remaining proceeds can be paid to the judgment creditor.

CONTACT A COLORADO ATTORNEY TODAY

To get the representation you need in pursuing a lawsuit and assessing your ability to collect your money after a victory in court, reach out to Volpe Law today to schedule a consultation. We can be contacted through our online consultation request form or by phone at (303) 268-2867. Our team of dedicated attorneys are here to listen to your case and identify the best legal options for you.

DISCLAIMER

The information contained on this website is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter.  Laws frequently change and therefore this content is not necessarily up to date, nor comprehensive. Contact us or another attorney with any legal questions specific to your matter. You may request a consultation by calling us as 303-268-2867 or completing a consultation request form.