How to Transfer Property After a Judgment is Granted

Judgments are legal decisions made in court after a lawsuit. Judgments require people to pay money, often after a credit card lawsuit in small claims court. Judgments are harmful to credit scores and also may lead to bank garnishment or seizure of personal property such as household furniture or automobiles. Those with judgments typically seek to protect their assets by transferring ownership to a friend or relative. Such transfers are not a criminal violation of the law, but a civil judge may consider them a fraudulent attempt to transfer assets and order the transactions reversed.

Instructions

1

Consult with an attorney about settling, appealing or dismissing the judgment. You should understand all legal options before starting to sell or give away your assets. Some judgments, called default judgments, are issued when people fail to show up in court. A judge may dismiss a default judgment if you or your attorney submits the proper paperwork showing why you failed to appear. The judge will order a new hearing, giving you time to reach an out-of-court settlement. Appealing a judgment also stops enforcement of a judgment until a judge issues a new ruling. An experienced consumer affairs attorney can discuss all of your options.

2

Sell assets for their fair market value. After judgments you have a right to sell or transfer assets just as you would at any other time. However, the transfers cannot serve as an obvious attempt to hide assets. For example, a judge is likely to suspect fraud if you sell a $10,000 car to a family member for $100 following a judgment. The party holding a judgment against you can file legal motions forcing you to discuss your assets, including transfers before and after the judgment. A car sold for its fair market value provides you with another asset --- cash --- but it's up to the party filing suit to find cash by locating your bank account and winning a garnishment order from the judge. Garnishment allows the debt collector to freely withdraw money from your account. Some people with cash after selling assets at fair market value decide against putting the money into bank accounts.

3

Keep most assets. Old electronics, clothing, books and used furniture are of little value. The debt collector can threaten to take everything you have, but that is usually a bluff. In most cases the debt collector is likely to spend more money seizing household items than the stuff is worth. The debt collector will incur court costs, moving costs and storage fees. That's why most debt collectors focus on big-ticket items such as automobiles, boats and expense jewelry.