Judgment Glossary
Key legal terms and concepts related to judgments, enforcement, and resolution—explained in plain English.
Education Only: This content is for educational purposes and does not constitute legal advice. Laws vary by state. Consult with a licensed attorney for guidance specific to your situation.
Asset Discovery
The process of locating a debtor's assets for judgment enforcement. Methods include debtor examinations, subpoenas to banks or employers, public records searches, and skip tracing services.
Asset Seizure
The legal process of taking possession of a debtor's property to satisfy a judgment. Seized assets may be sold at auction, with proceeds going to the creditor. Certain assets are protected by exemptions.
Bank Levy
A legal process where funds in a debtor's bank account are frozen and seized to satisfy a judgment. The bank typically holds funds for a period (often 10-30 days) before releasing them to the creditor, giving the debtor time to claim exemptions.
Bankruptcy Stay
An automatic court order that stops most collection activities when a debtor files for bankruptcy. The stay prevents creditors from pursuing wage garnishment, bank levies, lawsuits, or other enforcement actions while the bankruptcy case is pending.
Civil Judgment
A court order stating that one party (the debtor) legally owes money to another party (the creditor). It is the result of a lawsuit where the court has determined the debt is valid and enforceable.
Creditor
The person or entity to whom money is owed. After a judgment is entered, the creditor becomes the "judgment creditor" with legal rights to enforce collection.
Contempt of Court
Willful disobedience of a court order. In judgment enforcement, debtors who fail to appear for debtor examinations or violate court orders may be held in contempt, potentially resulting in fines or jail time.
Debtor
The person or entity who owes money. After a judgment is entered, the debtor becomes the "judgment debtor" and is legally obligated to pay the judgment amount.
Default Judgment
A judgment entered when the defendant fails to respond to a lawsuit or appear in court. Default judgments are common in debt collection cases and can often be challenged if the debtor was not properly served.
Disposable Income
The portion of income remaining after legally required deductions (taxes, Social Security, etc.). For wage garnishment purposes, federal law limits garnishment to 25% of disposable income or the amount by which weekly income exceeds 30 times the federal minimum wage, whichever is less.
Debtor Examination
A court-ordered proceeding where a judgment debtor is questioned under oath about their assets, income, and financial situation. Also called a "judgment debtor examination" or "supplemental proceedings." Failure to appear can result in contempt charges.
Discharge
The legal elimination of debt through bankruptcy. Not all debts are dischargeable—some judgments (like those for fraud or willful injury) may survive bankruptcy. Consult a bankruptcy attorney for specific guidance.
Exemptions
Legal protections that shield certain assets and income from judgment enforcement. Common exemptions include primary residence equity (homestead), retirement accounts, Social Security benefits, and necessary personal property. Exemption laws vary by state.
Garnishment Order
A court order directing an employer or bank to withhold funds from a debtor and send them to the creditor. Garnishment orders are used for both wage garnishment and bank levies.
Homestead Exemption
A legal protection that shields a certain amount of equity in a debtor's primary residence from judgment enforcement. Homestead amounts vary widely by state, from a few thousand dollars to unlimited protection.
Judgment Lien
A legal claim placed on a debtor's property (real estate, vehicles, etc.) to secure payment of a judgment. Liens prevent the debtor from selling or refinancing the property without first paying the judgment debt.
Judgment Interest
Interest that accrues on a judgment from the date of entry until it is paid. Judgment interest rates are set by state law and compound over time, significantly increasing the total amount owed.
Judgment Renewal
The legal process of extending a judgment's enforcement period before it expires. Renewal procedures vary by state but typically involve filing paperwork with the court before the original judgment expires.
Lien
A legal right or claim against property that secures payment of a debt. Liens can be voluntary (like a mortgage) or involuntary (like a judgment lien). They must be satisfied before property can be sold or transferred.
Lump-Sum Settlement
A one-time payment to resolve a judgment, typically for less than the full amount owed. Creditors often accept 40-70% of the judgment amount in exchange for immediate payment and avoiding enforcement costs.
Motion to Vacate
A legal request to set aside or cancel a judgment. Common grounds include improper service, fraud, or newly discovered evidence. Motions to vacate must typically be filed within a specific timeframe after judgment entry.
Payment Plan
A structured agreement to pay a judgment over time through monthly installments. Payment plans typically require higher total payment than lump-sum settlements but allow debtors to resolve judgments without large upfront payments.
Post-Judgment Interest
Interest that accrues after a judgment is entered. This is distinct from pre-judgment interest (interest on the debt before the lawsuit). Post-judgment interest rates are set by state statute.
Satisfaction of Judgment
A legal document filed with the court confirming that a judgment has been fully paid or settled. Once filed, the satisfaction removes the judgment from public records and stops all enforcement actions.
Settlement Agreement
A written contract between creditor and debtor outlining terms for resolving a judgment, often for less than the full amount owed. Settlement agreements should specify payment terms, interest waivers, and creditor's agreement to file a satisfaction of judgment upon completion.
Statute of Limitations
The time period during which a creditor can legally enforce a judgment. Statutes vary by state, typically ranging from 5 to 20 years. Many states allow judgments to be renewed before expiration.
Subpoena
A legal order requiring a person or entity to provide documents or testimony. In judgment enforcement, creditors may subpoena banks, employers, or other third parties to locate debtor assets.
Service of Process
The legal procedure for delivering lawsuit documents to a defendant. Proper service is required for a court to have jurisdiction. Improper service is a common ground for challenging default judgments.
Sheriff's Sale
A public auction of a debtor's property conducted by a sheriff or marshal to satisfy a judgment. Property is sold to the highest bidder, with proceeds going to the creditor. Debtors may have redemption rights to reclaim property after sale.
Wage Garnishment
A legal process where a portion of a debtor's wages are withheld by their employer and sent directly to the creditor to satisfy a judgment. Federal law limits garnishment to 25% of disposable income, but state laws may provide additional protections.
Writ of Execution
A court order authorizing a sheriff or marshal to seize a debtor's property or assets to satisfy a judgment. Writs of execution are used for bank levies, asset seizures, and property sales.
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