Visit any county courthouse in the country and you will find cases being tried in civil court. There are personal injury cases, evictions, and companies suing deadbeat customers who don’t pay their bills. When creditors win their cases, they may resort to placing liens on debtor property in hopes of getting paid. What happens when liens don’t do the trick?
The experts at Salt Lake City’s Judgment Collectors explain that every state has its own rules regarding how judgments can be enforced. But as a general rule, they say that executing a judgment by way of property seizure is the logical next step when liens are ineffective.
Creditors Enforce Their Own Judgments
The whole idea of placing liens on debtor property stems from the fact that civil courts do not pass sentences in the same way that criminal courts do. The best the civil court can do is enter a judgment against one party or the other. But because no crime has been committed, courts do not have enforcement authority.
For all intents and purposes, creditors need to enforce judgments themselves. They do have some legal tools at their disposal and, when necessary, courts may be involved. But enforcement ultimately rests with the creditor.
Placing Liens on Property
Judgment Collectors says that placing liens on debtor property is sometimes enough to encourage payment. A good example would involve placing a lien on a debtor’s vacation property. The lien prevents the property from being sold without satisfying the outstanding debt.
If the debtor were to decide to sell, sale proceeds would go towards settling the existing debt first. He would only get what was left over, if anything at all.
Liens can be placed on all sorts of property as allowed by state law. It could be residential property, commercial property, or even non-real estate assets. In every case, a lien represents a legal interest in that asset.
If the Asset Is Never Sold
While liens can be effective tools to encourage some debtors to pay, they can encourage other debtors to simply hunker down and play the waiting game. They just commit to not selling whatever asset has a lien against it until the statute of limitations on the judgment expires.
Creditors can try to play the waiting game as well, but it’s risky. Things can get frustrating when debtors continue to evade year after year. So is there anything a creditor can do if the asset he has placed a lien on never gets sold? Yes. It is called executing the judgment.
If a creditor has reason to believe that the asset in question is not likely to be sold prior to the expiration of the statute of limitations, he can move to execute the judgment. This means the creditor goes through the necessary legal channels to seize the asset in question. Once seized, the asset can be sold to repay the debt.
It’s Best to Get Help
There are other means for collecting on outstanding judgments, above and beyond liens and judgment execution. But none of them are any easier. The fact is that judgment enforcement is difficult. That is why Judgment Collectors recommends that creditors get help. Trying to collect in-house rarely works.
As for property liens, they may work for the simple fact that debtors don’t want liens attached their properties. When they don’t work, creditors often need to take the next step and judgment execution. That’s where things get very real for debtors. It is one thing to face a lien; it’s another thing to stand by and watch your property being seized and sold.