Greenbaum Law Group, LLP has been handling money judgments and their implications for both creditors and debtors for years. In this article we will try to give you an understanding of what a money judgment is, what is in it, and the legal process of enforcing judgments.
A money judgment is a court determination that a creditor has prevailed in a lawsuit against a debtor. This is a formal court document that has the full names of each Judgment Creditor and Each Judgment Debtor. It also has the amount of money the debtor owes the creditor. It is signed by a Judge or other court official and is an official government record. Getting a money judgment is necessary for a creditor as it gives them the legal authority to use the various collection methods that are not allowed without a judgment.
Circumstances Leading to a Money Judgment
A creditor can obtain a judgment against a debtor in the following situations:
- The debtor fails to respond to a lawsuit.
- The debtor settles the case with an agreement (called a Stipulation) that a Judgment may be entered unless the debtor pays.
- The debtor does not comply with a court order related to discovery requests.
- The debtor is unsuccessful in a summary judgment motion.
- The debtor loses at trial.
- Once a judgment is made, it must be formally entered or filed with the court clerk, typically a day or two after the decision. Components of a Monetary Judgment
A money judgment typically includes:
- Principal Debt: This is the core amount owed, such as the amount found by the court to be owing.
- Interest: Most money Judgments will include prejudgment interest. Prejudgment interest is not certain but is generally granted where the debt is not subject to dispute. The rate is Ten (10%) in California but may vary depending on the original agreement or state law.
- Court Costs: These are the expenses incurred by the creditor in pursuing the lawsuit, including filing fees and other legal costs.
- Attorney’s Fees: If the original contract or state law permits, attorney’s fees incurred by the creditor in obtaining the judgment may be included. These fees are often limited to a court schedule if the debt is not resolved through judgment after trial.
Enforcing Judgments Across State Lines – Sister State Judgments
Enforcing judgments can get complicated when dealing with other states. For example, if a creditor gets a judgment in California but the Debtor lives in a state other than California, the judgment creditor can register the judgment in the debtor’s current state as a Sister State Judgment to use local collection methods. This way creditors can enforce their judgments even if the debtor moves or has assets in multiple states.
But if a Debtor is in another state but has assets in California, it is preferred to file in California. Assets can be accounts, business accounts receivable, real property interests, inventory, or other assets.
Closing Thoughts
In summary, as commercial collection attorneys, we know the ins and outs and legalities of getting and enforcing money judgments. Creditors must use the tools to exercise their rights and the legal options.