A default judgment is a binding ruling issued by a court based on the failure of a party to make an appropriate response to a lawsuit. Typically, when a defendant fails to file a response to a lawsuit, a judge will enter a default judgment in favor of the plaintiff, awarding the plaintiff any relief requested in the original petition. Receiving a default judgment, however, does not automatically entitle you to payment of damages. To actually receive the relief ordered in a default judgment, you must obtain and file a writ of execution.
Obtain a judgment lien. A judgment lien is a security interest granted in property owned by a debtor as a result of a judgment against the debtor. Obtaining a judgment lien is an important step because a judgment debtor may not have sufficient assets to cover all of his debts. While Article 9 of the Uniform Commercial Code, or UCC, resolves the question of priority in assets between judgment creditors and regular creditors, recording your interest in a defendant’s goods as a judgment creditor will increase the likelihood of collecting on a default judgment. While the method varies by state, you can obtain a judgment lien by bringing a copy of your judgment to either the Secretary of State or UCC recording office.
Locate suitable property owned by the defendant and determine if other parties have a security interest in this property. You can determine what property a defendant owns by checking with the county and state UCC recording offices where the defendant lives and owns property and performing a records search. Most states permit a defendant to claim a homestead exception, which allows a defendant to exempt one dwelling, one automobile and some personal property from a creditor lien. Additionally, it may not be wise to direct a sheriff to seize property in which another party has a strong security interest in.
Determine if the defendant’s property can be seized by a sheriff. A sheriff cannot seize and liquidate a person’s land to pay creditors, but may seize personal property owned by a defendant. If the only valuable assets owned by a defendant are land, you may need to maintain your judgment lien and wait for the defendant to sell or otherwise transfer the land. If a defendant owns other assets that can cover your judgment lien, you may direct a sheriff to seize and liquidate them.
Obtain a writ of execution from the court issuing the default judgment and file the writ of execution with the sheriff of the county where the defendant has obtainable assets. Bring a copy of the court order granting a default judgment to the clerk of court that issued the decision. It will issue you a writ of execution, which you must then file with the sheriff. Most sheriff’s offices will require you to pay a refundable deposit to cover the cost of holding a sheriff’s sale.
Receive proceeds from the sheriff’s sale. Proceeds gained from a sheriff’s sale are first used to cover the cost of conducting the sheriff’s sale, with the remainder of the proceeds going to pay creditors according to their Article 9 priority.
Renew any “patient” judgment liens. Under Article 9 of the UCC, a judgment lien may only last for 10 years, but may be renewed for another 10 years six months before the lien is set to expire. If you have placed a judgment lien against a defendant’s property and are waiting for the defendant to sell the property, failing to timely renew a judgment lien results in your claim losing priority, which may prevent you from collecting when the property is sold.
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