What Is a Judgment Debtor?

If you are behind in paying your bills, were sued and lost or have lost a civil court case resulting in a monetary award to the plaintiff, you now have a judgment against you. Prior to the judgment, you were only a debtor. Post-judgment, you are now known as a judgment debtor and, as such, are subject to the various avenues available for the owner of the debt to collect his money.

Implications

As a judgment debtor, you are now subject to collection proceedings in a civil court. With the judgment, the person who holds the debt can request a court order against you to pay the debt. Several paths can be taken to achieve this goal; among them are: your assets can be seized, your bank account can be frozen and your wages can be garnished. Each state has a limit to what can be taken from you, and the federal government sets limits related to garnishing your wages, though states can override these limits if the terms are more favorable to the debtor.

Asset Seizure

One way to collect a debt is to get a judge to order a discovery of assets. In this scenario, the debt owner files papers to which you are required to respond, identifying any assets you have, such as bank accounts, financial holdings, property, debts owed to you, potential settlements, cars or other items that may have a resale value. If you have a bank account or financial holdings, such as CDs or stocks, the judge can order that these assets be turned over to the debt owner to pay the debt. Until they are, these assets are frozen and unavailable for your use. If the judgment is high enough to warrant it, your property can be seized and sold as well.

Wage Garnishment

A wage garnishment can be ordered if you have insufficient assets to pay off the judgment. In a wage garnishment, the judge issues a court order to your employer, requiring that she deduct a specified amount of money from your wages. Federal law does not allow more than 25 percent of your disposable income to be deducted from your weekly wages or 30 times the federal minimum wage, whichever is less. Disposable income is your earnings, less any statutory deductions from your paycheck, such as taxes, mandatory pension contributions or court-ordered judgment payments. Voluntary contributions to your 401k, union dues and insurance premiums, for example, are not considered exempt for these purposes. Once the judgment is affirmed, your employer is required to deduct the judgment amount from each paycheck until ordered by the court to stop, the statute of limitations on collections is over or the debt is paid in full. If your employer does not withhold the money, she is in contempt of court and is subject to court-ordered penalties.

Income Exemptions

Certain income, such as Social Security retirement and income benefits, Railroad Retirement, military annuities, FEMA disaster aid, student aid, veteran's benefits, military pay and other federal income is exempt and cannot be garnished for nonfederal debt.