Post Judgment Civil Remedies – Collecting Judgments
After you get a civil judgment there are a number of tools available to help get your money. These tools, called post judgment civil remedies, include garnishment, execution on property, debtor’s examinations and recording judgments. These remedies can be very effective unless your debtor is insolvent. Insolvent debtors frequently declare bankruptcy. It is virtually impossible to collect from an insolvent debtor, even if they don’t declare bankruptcy.
On the other hand, if your debtor is employed it is often possible to collect on a judgment with a wage garnishment. A wage garnishment can collect a judgment over time. A wage garnishment or any other type of post-judgment remedy can be stopped by a debtor’s bankruptcy filing.
Many people believe it’s futile to attempt to collect a judgment if the judgment debtor declares bankruptcy. While this is sometimes true, it is possible to collect your debt through the bankruptcy court. There are four different types of bankruptcy, generally described by referring to the chapter in which they can be found in the bankruptcy code. In a Chapter 13 case, sometimes called a consumer bankruptcy, the debtor adopts a plan to repay creditors over time. Judgment creditors can recover on their judgments by making a claim and getting included in the plan. It’s also possible for a creditor to recover in a Chapter 11 case, sometimes called a “reorganization.” Chapter 11 cases involve businesses that hope to continue operating after a bankruptcy.
If your judgment debtor files a Chapter 7 bankruptcy petition and follows through with the bankruptcy your judgment can be wiped out by the “discharge” at the conclusion of the bankruptcy case. However, there are a couple of scenarios in which your judgment can survive even a Chapter 7 bankruptcy petition by your debtor. The most common of these are cases in which the debtor does not complete the Chapter 7 case.
Some debtors are frequent bankruptcy filers. The debtor uses a bankruptcy petition to “freeze” all of his creditors and then the debtor fails to complete the bankruptcy process. Bankruptcy law and bankruptcy courts attempt to discourage frequent filers; it is considered abuse of the bankruptcy system. Still, some debtors regularly use a bankruptcy petition to stop creditors. When a bankruptcy petition is filed, the court sends a notice of automatic stay to all creditors the debtor has identified in the schedules attached to the debtor’s petition. Some creditors will stop all collection efforts against the debtor and move on to the next case in their portfolio.
The second situation in which a Chapter 7 filing might not discharge your judgment is when the debtor fails to identify you as a creditor and you have no actual knowledge that the debtor filed a bankruptcy petition. Bankruptcy law allows debts to be discharged. But, there are due process requirements built into the law. The creditor should be given notice that the debt may be discharged. After notice the creditor has the opportunity to go into the bankruptcy court to make a claim and even to contest the discharge. For example, if a debtor files a Chapter 7 petition and does not actually satisfy the Chapter 7 “means test” to qualify for a Chapter 7 discharge, the creditors can object to the discharge and even prevent it. However, if the debtor fails to identify a creditor on the schedules attached to his petition, then that particular creditor has been denied due process. They will receive no notice that the petition has been filed or notice that they may object to the discharge. If a creditor has no actual notice that his debtor filed a bankruptcy petition, the creditor may be able to collect his judgment even after the debtor’s other creditors were discharged.
This page is for people who want to get their money using Arizona civil remedies like garnishment. If you want to attempt to get your money from a debtor who has filed bankruptcy, please follow this link.
Our Fixed Fee Post Judgment Remedies
Wage Garnishment $350
Bank Garnishment $400
Debtor’s Examination $500
Writ of Execution $500