Winning a lawsuit in Allentown, Pennsylvania is only the first step in recovering what you're owed. When a court rules in your favor and issues a judgment, it doesn't automatically put money in your pocket or force the losing party (the judgment debtor) to comply with the court's decision. The court provides the judgment – but enforcement of that judgment is largely your responsibility as the judgment creditor.
Many judgment creditors are surprised to learn that collecting on a judgment requires additional effort, time, and sometimes expense. In fact, a significant percentage of judgments go uncollected.
At Van Horn Law, we work closely with our clients so that they are well-informed, know what to expect, and ultimately receive what they are owed.
Our civil litigation team in Allentown understands enforcement mechanisms and plans strategically to increase your chances of recovery.
If you have a legal issue and want to explore your options, contact us at 610-437-2757 today to set up your consultation.
Understanding the Judgment Enforcement Timeline in Allentown, Pennsylvania
After a lawsuit is settled or a trial concludes, a final decision is made, which is either a judgment (judge's decision) or verdict (jury's decision). Once the final decision is entered, the judgment must be enforced, but the collection of a monetary award is not automatic.
This process involves several steps:
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- You must obtain a final judgment. Once the court issues a judgment in your favor, there is usually a waiting period during which the debtor can appeal. After this period expires, you can begin enforcement efforts.
- You must conduct asset discovery. Before attempting enforcement, you will need to identify the debtor's assets that can be used to satisfy the judgment.
- You may need to choose an appropriate enforcement method. Based on the discovered assets, the most effective collection strategy must be selected.
- You must implement enforcement actions. Depending on the situation, you may need to take legal steps to seize or encumber assets or compel payment.
- You must record satisfaction of judgment. Once the judgment is paid, you must file documentation with the court to show the debt has been satisfied.
Remember that judgments have a limited lifespan, typically 5-20 years depending on the jurisdiction, though they can usually be renewed. Acting promptly on enforcement increases your chances of recovery, and that is why it is important to retain a civil lawyer who knows how to enforce judgments properly, timely, and effectively.
Locating the Debtor's Assets in Allentown, Pennsylvania and Beyond
Before you can enforce a judgment, you must identify assets owned by the judgment debtor that can be used to satisfy the debt. Common discovery methods include written discovery, a debtor's examination, or a search of public records.
Written Discovery
You can serve the debtor with written questions (interrogatories) about their assets.
The interrogatories can include questions about but are not limited to their:
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- Bank accounts and financial institutions
- Real property ownership
- Personal property of value
- Employment and income sources
- Business interests
- Investments and Securities
- Expected inheritances or receivables
The debtor is legally obligated to respond truthfully to these inquiries.
Debtor's Examination
A debtor's examination (also called a supplementary proceeding or judgment debtor examination) is a court-ordered hearing where you or your attorney can question the debtor under oath about their assets and finances. This powerful tool allows for immediate follow-up questions and can be highly useful to discover hidden assets.
During the examination, the debtor must bring financial records like tax returns, bank statements, property deeds, and business records. Failing to appear or provide truthful information can result in contempt of court charges.
Asset Searches and Public Records
Independent investigation can also reveal valuable information about a debtor's assets.
You or your attorney can conduct searches to locate:
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- Property tax records that reveal real estate holdings
- DMV records that show vehicle ownership
- UCC filings that indicate business assets
- Corporation records that reveal business interests
Part of this search process can include social media. Analyzing the debtor's social media posts can reveal a lifestyle inconsistent with claimed inability to pay.
Enforcing a Judgment in Allentown, Pennsylvania
Once you've identified assets, you can begin the enforcement process. Several enforcement methods are available – the ones you use will depend on the types of assets discovered.
Wage Garnishment
Wage garnishment allows you to collect directly from the debtor's paycheck. Federal law limits garnishment to 25% of the debtor's disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less. However, these limits don't apply to certain types of debts like child support.
To garnish wages, you will need to:
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- Obtain a writ of garnishment from the court; and
- Serve the writ on the debtor's employer.
Once these two tasks are completed, the employer will withhold the specified amount from the debtor's paycheck and send the funds to you or the court.
Wage garnishment continues until the judgment is satisfied or the debtor's employment ends.
Bank Account Levies
A bank levy allows you to seize funds directly from the debtor's bank accounts.
To do so, you will need to:
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- Obtain a writ of execution or similar document from the court; and
- Provide the writ to the sheriff or marshal along with information about the debtor's bank.
Once these two tasks are completed, the sheriff will serve the writ on the bank, and the bank will then freeze the account. The bank will pay the funds to satisfy the judgment after a statutory waiting period – the waiting period allows the debtor to claim exemptions.
An important point about bank levies is this: They only capture funds present at the time the levy is served. Timing will be critical because if you fail to do it properly, you may recover little to nothing.
Property Liens
A judgment lien attaches to the debtor's real or personal property and prevents the debtor from selling or refinancing the property without first satisfying the judgment. Liens are particularly effective for patient creditors who can wait for the debtor to sell or refinance their property.
To create a lien, you must:
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- Record an abstract of judgment with the county recorder where the debtor owns real property or the secretary of state, depending on the jurisdiction; and
- File UCC financing statements for personal property.
When the property is sold or refinanced, the judgment typically must be paid from the proceeds. If multiple liens exist, they're generally paid in order of recording (first in time, first in right).
Property Seizure and Sale
If the debtor owns valuable personal property (vehicles, equipment, inventory, etc.), you may be able to seize and sell these assets.
To do so, you will need to:
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- Obtain a writ of execution from the court; and
- Deliver the writ to the sheriff with information about the property.
The sheriff will then seize the property. Once sold at a public auction, the proceeds can be used to satisfy the judgment.
This method can be costly due to seizure, storage, and auction fees, so it's most effective for higher-value items. Additionally, many personal items may be protected by exemptions.
Real Property Execution
Similar to personal property seizure, real property (land and buildings) can be sold to satisfy judgments.
Again, you will need to:
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- Record a judgment lien as described above; and
- Obtain a writ of execution.
The sheriff will conduct a sale of the property. The proceeds will be used to satisfy the judgment but only after senior liens and exemptions have been satisfied.
This method is complex and subject to strict procedural requirements, including proper notice and debtor redemption rights.
Assignment Orders
For assets that can't be easily seized, such as intellectual property rights, contract rights, or commission income, you must file a motion for an assignment order. If granted, the court orders the debtor to assign certain rights to you. You then collect payments directly from third parties who would otherwise pay the debtor.
This method is particularly useful for recurring payments like royalties, commissions, or payments due under contracts.
Receivership
In complex cases involving businesses or substantial assets, a court may appoint a receiver. The receiver takes control of the debtor's property and manages and possibly liquidates assets. The proceeds are used to satisfy creditors.
Receivership is expensive but can be effective when dealing with ongoing businesses or complex asset structures.
Charging Orders
For debtors with interests in partnerships or LLCs, a charging order can capture distributions. You must obtain a charging order from the court. The order directs the entity to pay to you any distributions that would otherwise go to the debtor. You receive these payments when distributions are made.
Charging orders typically don't allow you to force distributions or participate in management, making them most effective when the entity regularly distributes profits.
Dealing with Collection Challenges in Allentown, Pennsylvania
The collection of funds to satisfy a judgment debt is often riddled with challenges. With a skilled lawyer to help, you can deal with collection challenges promptly and adequately to safeguard immediate or future collection efforts.
Judgment Proof Debtors
Some debtors are considered "judgment proof," and that can mean one or all of three things:
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- They have no assets beyond exempt property;
- Their income comes entirely from exempt sources like Social Security; and/or
- They have superior creditors who would take priority over your claim.
When a judgment debtor is found to be judgment proof, they cannot satisfy the debt and so collecting on a judgment is unlikely. That said, recording your judgment is valuable as the debtor's financial situation may improve in the future.
Debtor Bankruptcy
If a debtor files for bankruptcy, an automatic stay immediately stops all collection activities. Depending on the type of bankruptcy and the nature of your judgment, the debt may be discharged or reduced.
Certain types of judgments, such as those for fraud, willful injury, or certain tax debts, may be non-dischargeable in bankruptcy.
Debtor Evasion Tactics
Some debtors actively try to avoid judgments by employing such tactics as:
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- Transferring assets to family members or entities
- Hiding assets offshore
- Using cash businesses to hide income
- Claiming excessive exemptions
Fraudulent transfer laws allow you to claw back assets improperly transferred to avoid creditors. Additionally, courts can impose sanctions for debtors who hide assets or lie during discovery.
State Reciprocity and Foreign Judgments
If the debtor has moved to another state, you'll likely need to domesticate your judgment. In most situations and jurisdictions, you would file the judgment in the new state under the Uniform Enforcement of Foreign Judgments Act (adopted by most states).
Once domesticated, the judgment can be enforced using that state's procedures.
If your debtor has moved internationally, enforcement becomes significantly more complex and may require assistance from foreign courts, depending on treaties and international agreements.
Strategic Considerations for Effective Judgment Enforcement
Again, enforcing a judgment in Allentown, Pennsylvania or anywhere else is not automatic – there's a process to it. Below are a few things to consider to develop an effective strategy.
Timing the Enforcement Actions
Strategic timing can significantly impact recovery success.
For example:
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- Bank levies are most effective just after deposits are made
- Wage garnishments work best for debtors with stable employment
- Property liens may require patience but can result in full payment
Also, enforcement priority can matter when multiple creditors pursue the same debtor. It is important to understand where you are within the line of priority so that you can determine when it's best to pursue enforcement of the judgment.
Negotiating Settlements
Often, the most efficient resolution is a negotiated settlement. In this scenario, debtors may pay willingly to avoid garnishment or public sales, but also:accepting a reduced lump sum or a payment plan can be beneficial. A lump sum may be preferable to long collection efforts while a payment plan can provide steady recovery when the debtor has limited means
Generally, settlements provide certainty and avoid further enforcement costs.
Cost-Benefit Analysis
Enforcement efforts cost money, so you should understand what the potential costs are as compared to the potential benefits.
Consider:
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- Filing fees for writs and other documents
- Service fees for legal papers
- Sheriff's or marshal's fees for seizures and sales
- Investigation costs for asset searches
- Attorney's fees for complex enforcement
Before pursuing certain enforcement methods, you or your attorney should weigh the likely recovery against these costs.
Rights as a Judgment Debtor in Allentown, Pennsylvania
It's important to keep in mind that all parties have rights, and so judgment debtors have rights, too. Namely, and as noted above, debtors have a right to identify and claim exempt income and assets. Likewise, most jurisdictions provide exemptions for necessary property and income. Procedures exist to claim these exemptions when enforcement is attempted.
If you are looking to enforce a judgment, it's worth saying that improper enforcement can be challenged through court procedures. You want to ensure you follow the rules of the court and the law properly and timely.
Also, as noted above, judgment debtors might, in appropriate circumstances, qualify for bankruptcy protection. Thus, understanding these rights can help make more informed choices about how and when to proceed with enforcement of a judgment.
Why Choose Van Horn Law for Legal Representation in Allentown, Pennsylvania
While some judgment creditors handle enforcement themselves, professional legal assistance often increases recovery.
At Van Horn Law, we understand strategic enforcement sequences. We will also thoroughly investigate the debtor to locate hidden assets. Plus, we will help you navigate exemptions and all procedural requirements.
Contact a Litigation Lawyer in Allentown Today to Take Control of the Enforcement of a Judgment
Obtaining a judgment is just the beginning of the recovery process. By understanding the available enforcement tools, strategically implementing them based on the debtor's assets, and maintaining persistence, you can significantly increase your chances of turning a paper judgment into actual recovery.
Whether you are a judgment creditor seeking to collect what you're owed or a judgment debtor seeking to understand your obligations and rights, we at Van Horn Law in Allentown, Pennsylvania will help you navigate this complex process.
