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Rules for a Creditor To Obtain Judgment On A Debtor
from: Mortgage & Debt FactsThe Question:
Can A Creditor Obtain A Judgment Without Serving The Debtor?
The Answer:
NO!
There are two steps for unsecured creditors to seize the assets of a defaulted debtor. First, a judgment must be obtained and then, second, the judgment must be executed in order to seize the debtor's assets.
RUles For A Creditor To Serve Debtor And Obtain Judgment
Both debtors and creditors are protected under federal laws. According to the Fair Debt Collection Practices Act (FDCPA), an unsecured creditor, whether by agreement or not, may not grab, or seize, the debtor's money or any other property.
The creditor is required by law to sue the debtor for a money judgment. The debtor must be served the papers advising of the complaint and date of hearing.
Once the judgment is granted by the Court, the money needs to be reinforced through seeking of property through another process, called the "execution."
Regarding the question, "Can a creditor obtain a judgment without serving the debtor?" the judgment against the creditor remains unsecured without the execution process. Getting a judgment from a judge does not mean money will be collected automatically.
Process For A Creditor To Collect From A Debtor
A step-by-step process needs to be followed by the individual, creditor, or collection agency:
• The judgment most be entered in the state where the debtor resides or has their assets:
➢ Legal steps are required to force the debtor to pay the judgment.
➢ If contested, a hearing will be held
• All judgment liens should be perfected immediately:
➢ Liens for personal property assets are filed with the Secretary of State for a Notice of Judgment Lien to be served to the judgment debtor.
➢ Liens are allowed to be placed in lawsuits, with a lien allowed to be placed on the potential settlement remaining.
➢ During this time, the judgment debtor is not allowed to sell, refinance, or transfer the property designated without paying the judgment lien.
• An enforced judgment by the creditor by executing upon the debtor's assets is done:
➢ A "Writ of Execution" from the Court to the Sheriff's Office to have assets owned by the debtor seized to satisfy the judgment.
➢ Items include: wages, bank accounts, and vehicles.
To fulfill the question, "Can a creditor obtain a judgment without serving the debtor?" one needs to know the entire creditor system in order to not only follow it but to apply it.
It seems obvious that people who do not have money cannot pay bills. But sometimes people who can pay their bills choose to hide their assets, or spend their money in other ways. The legal system provides a process to find out what you do have, and to collect it through a court order.
Creditors seeking this information may hire a private investigator to locate the assets. Alternatively, a creditor may request a court scheduling for a supervised examination of the debtor to examine the debtor's assets.
"Can a creditor obtain a judgment without serving the debtor?" Now you understand that the answer is "no."
Is It Worth Hiding From Creditors?
There are rules set forth for a creditor to seek and obtain a judgment against a debtor. Though it can be a long process, following the legal steps and obtaining a judgment may provide payment to the creditor.
A judgment will stay on record and follow the debtor for many years, with the possibility of being renewed for another term if the creditor has not yet collected.
If you find yourself in a position of owing money that you cannot repay, you will probably find it less stressful in the long run to work out a payment plan with the creditor or seek some other form of credit counsel.
Good Luck!
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