When a person is owed money for a debt, he often resorts to filing a civil complaint against the debtor when other methods of securing payment are unsuccessful. If the creditor wins a judgment against the debtor, he can then use the powers of the court to attempt to obtain payment for the debt. If the debtor is still unable to pay, the debtor may eventually seek the protection of the U.S. bankruptcy courts.
Filing for a Judgment
State laws and procedures differ somewhat with regard to filing for a judgment, but the basic process is similar throughout the states. If the amount in controversy, or owed, is under a certain amount, then the creditor can file a complaint in a small claims court. If the amount owed exceeds the small claims court limit, then the plaintiff, or creditor, must file a complaint in the superior or circuit court. The complaint must usually be filed in the county where the defendant, or debtor, lives or owns a business, or where the event that gave rise to the claim happened, as in the case of an auto accident.
Obtaining a Judgment
After the plaintiff files the complaint, it must be served upon the defendant by an acceptable method of service in the state where the complaint was filed. The defendant is then given an opportunity to respond, in writing, to the complaint. If the defendant fails to respond, the plaintiff may ask the court to enter a default judgment against the defendant. If the defendant does respond, then a trial date will be set. At trial, each party will be given the opportunity to present evidence and testimony regarding the allegations in the complaint. The judge, or jury, will then render a decision. If the decision is in favor of the plaintiff, then the court will enter a monetary judgment against the defendant.
Post-Judgment Collection Options
Once the plaintiff has obtained a judgment against the defendant, he must still collect on the judgment. After the period to file an appeal has expired -- usually 30 days -- the plaintiff may ask the court to garnish the defendant's wages or bank account, or ask for a writ of execution against personal or business property. Which post-judgment procedures are available vary by state. The plaintiff may also be able to require the defendant to return to court to answer questions regarding income and assets.
Effect of Bankruptcy on a Judgment
When an individual files for bankruptcy protection, an automatic stay is immediately entered that prevents all creditors from continuing, or beginning, any collection efforts for debts owed by the individual. What happens to a judgment when a bankruptcy is eventually discharged depends on the bankruptcy chapter under which the individual filed. If the debtor filed under a chapter 7, then the judgment will usually be discharged, meaning the debtor will no longer owe the debt. Some debts cannot be discharged, such as child support and some federal debts. If the debtor filed under other chapters, the judgment may become part of a repayment plan and be paid off over the course of the next three to five years.
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