How to Collect on a “Judgment”
In a collection case, if the Plaintiff wins, the court grants the Plaintiff what is known as a “judgment”. The judgment is simply the court’s determination of whether or not the Defendant owes the Plaintiff money.
The judgment is step one in the collection process. The second step is how the Plaintiff will collect on its judgment.
Just because a Plaintiff receives a judgment doesn’t mean the Plaintiff will immediately get the money it is owed. Many times, the Defendant does not have any money in his/her bank account and the only asset the Defendant has is his/her wages. A common misconception of Defendants/debtors is that if they do not pay the Plaintiff they will go to jail. This is completely false. One does not go to jail for not paying his/her debts.
In Indiana, a Plaintiff can attempt to “execute” on a judgment if after 30 days from the date the judgment is entered the Defendant has not “satisfied” the judgment, i.e. paid the Plaintiff the money owed.
The primary way Plaintiffs execute on judgments is via a proceeding supplemental hearing where the Plaintiff, aka creditor, will try to find out where/what the Defendant’s assets are. The most common assets being: money in bank accounts or wages from work. Creditors are entitled to garnish up to 25% of the Defendant’s pre-tax earnings. Additionally, creditors are entitled to levy against a Defendant’s bank account to collect on its judgment. Every judgment in Indiana also automatically puts a lien on any real estate the Defendant owns.
By: Jon Schulte