What Happens if Someone Has a Judgment Against Me?

If you ever find yourself in financial trouble, you may be contacted by debt collection agencies to try to recover the funds you owe. If you do not pay them, they can eventually take you to court to have the court order you to pay them. If the court rules in a creditor's favor, the creditor is then allowed to pursue your money with new methods. These methods help ensure that they get the money that you owe them.

Wage Garnishment

A wage garnishment is a common method used by creditors to recover funds that you owe them once a court order is in place. The creditor requests a garnishment order from the judge and the judge writes up the order. The court submits the garnishment order to your employer who will then take a specified amount of money out of each of your paychecks until the debt is paid. The order cannot garnish more than 25 percent of your gross income.

Bank Account Levy

Creditors are also given the power to initiate a bank account levy if the judgment goes in their favor. With this method, your bank account is essentially frozen. You will not be able to make any withdrawals from your account. You will not receive any notice before this levy is put on your bank account, which can result in checks that you have written bouncing. A bank levy is a one-time action that will remove all of the money that is in your account at the time of the levy to pay toward your debt.

Lien

If you do not have assets or income that can be withheld, your creditor can put a lien on any property that you have, including your home. This means it will be more difficult for you to sell your home. The lien assures your creditor that the debt will be paid off at some point in the future. If the property is sold, foreclosed on or refinanced, your creditors will get their share of the profits off the top. Once you have successfully paid your debt, the lien will be removed.

Property Repossession

If there is any secured property associated with the debt that you have, the creditor can ask to be allowed to seize that property and resell it. The profits from that sale would then go toward your debt so the creditors are assured of getting at least part of what they are owed. In some cases where the amount is high and you have equity in your home, a creditor can request that your home be sold to pay for the debt.