Greenbaum Law Group, LLP has extensive experience in handling money judgments and their implications for both creditors and debtors. In this article,we attempt to give you an understanding of what a money judgment entails, its components, and the legal processes involved in enforcing judgments.
A money judgment is a legal determination made by a court, confirming that a creditor has prevailed in a lawsuit against a debtor. This judgment is a formal court document that specifies the full names of each Judgment Creditor and Each Judgment Debtor. It also specifies the amount of money owed by the debtor to the creditor. It is signed by a Judge or other court official and is an official government record. Obtaining a money judgment is a necessary step for a creditor, as it provides legal authority to pursue the various collection methods that are not permissible without such a judgment.
Circumstances Leading to a Money Judgment
A creditor may obtain a judgment against a debtor in several scenarios, including:
- 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
Enforcement of judgments can become complex when dealing with different states. For instance, if a creditor obtains a judgment in California but the Debtor resides in a state different from California, the judgment creditor, may register the judgment in the debtor’s current state as a Sister State Judgment to utilize local collection remedies. This process ensures that creditors have the means to enforce their judgments even when debtors relocate or have assets in multiple states.
But if a Debtor is in a different state but has assets in California, filing in California is preferred. Assets can include accounts, business accounts receivable, real property interests, inventory or other assets.
In conclusion, as commercial collection attorneys, we understand the intricacies and legal nuances involved in obtaining and enforcing money judgments. It is crucial for creditors to navigate these processes with tactics to implement their rights and the legal avenues available.