If a court sides with the plaintiff in a debt collection lawsuit, the plaintiff becomes a judgment creditor while the defendant is the judgment debtor. The court’s decision provides the judgment creditor with collection tools he did not have previously, such as the ability to seize certain assets from the judgment debtor. State laws vary regarding the additional collection rights judgments provide to creditors.
A judgment creditor reserves the right to place a real estate lien on the debtor’s home or land. This lien secures the debt the consumer owes. If the individual does not pay the debt, the judgment creditor can move to foreclose on her property. To foreclose on the judgment debtor’s real estate, the creditor must pay off any previously recorded liens against the property, foreclose on the property and sell it for enough money to cover the judgment, the foreclosure and any other liens the company had to pay off.
Judgment creditors can place a lien against a debtor’s personal vehicle. After the creditor records a lien against the vehicle’s title, he can then seize the vehicle should the debtor fail to pay the judgment. Judgment creditors in some states, such as Pennsylvania, can demand that a debtor pay the costs associated with seizing their vehicles in addition to the original judgment amount in order to get his car back. Otherwise, the creditor sells the debtor’s car in an effort to recoup the debt.
A court judgment gives a judgment creditor the right to request that the court issue a garnishment order. The county sheriff serves the garnishment order to the bank holding the debtor’s bank accounts. After a mandatory account freeze, during which the debtor has an opportunity to contest the seizure of her bank accounts, the bank withdraws the amount the debtor owes and turns it over to the judgment creditor. In the event the debtor owes more than his bank account contains, the bank will withdraw the full balance. Should this occur, the judgment creditor often waits several weeks for the debtor to make additional deposits before executing yet another bank levy.
A judgment creditor has the option to serve a garnishment order on the debtor’s employer rather than her bank. If the debtor’s state permits wage garnishment, the judgment debtor’s employer must withhold a percentage of her wages each pay period to contribute to her outstanding debt. A judgment creditor can only garnish the amount by which a debtor’s weekly wages exceed 30 times the minimum wage or 25 percent of his total paycheck, whichever is less.