Understanding Judgment Enforcement as a Debtor

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Understanding Judgment Enforcement as a Debtor

If someone has obtained a money judgment against you, it is important to understand how the judgment creditor may collect on the judgment.  As a debtor, the best option is to pay off a judgment as soon as possible to avoid dealing with the various collection methods a creditor may utilize to collect on a judgment.  If full payment is not immediately possible, reaching out to the creditor to negotiate a payment plan or other arrangement is the next best option.  Many creditors may be willing to negotiate instead of pursuing the collection methods discussed below.

If the creditor cannot obtain payment of the judgment amount, the creditor can use several tools to collect against you.

A common form of judgment enforcement is wage garnishment.  Wage garnishment involves an employer withholding a portion of the debtor’s paycheck for the purpose of paying the judgment creditor.  It is important to note the amount withheld is typically calculated based on many factors to ensure the debtor is not left without a paycheck entirely.  However, the withheld amount may still be a substantial portion of the debtor’s paycheck. You will be notified before garnishment occurs, meaning that may be a good opportunity to contact the creditor and arrange for payment before you see your paycheck reduced.

A judgment creditor may also enforce a judgment by levying on bank accounts.  If your bank account is levied as part of a collection effort, the entire amount may be executed on – meaning all funds may be frozen.  If you receive notice of a levy on your bank accounts, it is important to respond to claim any exemptions allowed under law, because a bank levy may leave your bank accounts drained and leave you in a difficult situation.

It is also crucial to understand that as a judgment debtor, the judgment will appear when you seek loans and other financing in the future. The judgment itself, especially if it remains unsatisfied, will make it difficult to obtain financing in the future.  Depending on the exact scenario, creditors may have additional ways to collect on a judgment.  These are just a few ways a judgment can affect your life and finances.

If you need assistance, attorneys at O’Keeffe, O’Brien, Lyson & Foss can help you.  Contact an attorney at O’Keeffe O’Brien Lyson Attorneys in Fargo, North Dakota or call 701-235-8000 or 877-235-8002 to discuss your case.