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Civil Litigation:Process and Procedures        Chapter Twenty   Enforcement of Judgments
Enforcement of Judgments              The legal team’s litigation responsibilities               do not end until the jud...
Enforcement                Federal and many state rules require                 waiting 10 days after the entry of       ...
Collection Methods                Non-adversarial                     Collection letter with verification               ...
Authorization for Distribution                The paralegal may prepare a statement                 for the client, an Au...
Typical Schedule of DistributionCivil Litigation: Process and Procedures       © 2009 Pearson Education, Upper Saddle Rive...
Adversarial Proceedings                If the judgment debtor fails to respond                 to the collection letter, ...
Full Faith and Credit                The state court will recognize the validity                 of a federal decision (w...
The Collection Process                The state system will apply its own laws to                 the collection process ...
Replevin                A court process that permits the                 judgment holder to actually take back a         ...
Garnishment                Usually against wages                Permits judgment creditor to serve a                 deb...
Levy                Process of identifying property which                 may be the subject of an execution sale        ...
Execution                Sale, usually at auction, of debtor’s                 goods to satisfy judgment                ...
Uniform Enforcement         of Foreign Judgments Act                Simple, uniform process of lodging                 fo...
UEFJA                Requires                     An authenticated or certified copy of the                      judgmen...
Registering a Foreign JudgmentCivil Litigation: Process and Procedures        © 2009 Pearson Education, Upper Saddle River...
Execution on the Judgment                The registered judgment can be collected                 by execution          ...
Exempt Property                Generally, execution can proceed                 against real or personal property        ...
Satisfying the Judgment                The debtor can pay the debt or the                 property may be sold          ...
Locating Assets              Interrogatories in aid of execution                    Questions concerning location of the...
Judgment Proof Debtors                Usually researched as part of intake,                 the defendant’s assets are a ...
Post-Judgment Interest                Varies by jurisdiction, e.g.,                     Not available                  ...
Fair Debt         Collection Practices Act                Protects the the debtor in collection of                 consum...
Interpretation of FDCPA and         Law Firms          Sayyed v. Wolpoff & Abramson, 485 F.3d            226 (4thCir. 2007...
Bankruptcy                Ability to collect from a debtor filing                 bankruptcy depends on the circumstances...
Other Bankruptcy Outcomes                The petition could be dismissed                Can request a relief from the au...
Satisfaction                Once the debt is settled, it is important                 to file a notice of debt satisfacti...
Satisfaction of Judgment FormCivil Litigation: Process and Procedures        © 2009 Pearson Education, Upper Saddle River,...
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Chapter 20 twenty enforcement of judgments civ lit 2nd

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Transcript of "Chapter 20 twenty enforcement of judgments civ lit 2nd"

  1. 1. Civil Litigation:Process and Procedures Chapter Twenty Enforcement of Judgments
  2. 2. Enforcement of Judgments  The legal team’s litigation responsibilities do not end until the judgment is collected & distributed  Plaintiff & Defendant become judgment creditor (to whom the money is owed) and judgment debtor (who owes the money)  Because of counterclaims, etc., either party can be owed damagesCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 2
  3. 3. Enforcement  Federal and many state rules require waiting 10 days after the entry of judgment before beginning enforcement  The judgment may be further stayed, however, for posttrial motions & appeals, around 30 days after the judgment entryCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 3
  4. 4. Collection Methods  Non-adversarial  Collection letter with verification information is sent to the judgment debtor  May contain a satisfaction piece, to be filed once the debt is paid  May result in the debtor (e.g., an insurance company or corporation) processing the demand and issuing a checkCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 4
  5. 5. Authorization for Distribution  The paralegal may prepare a statement for the client, an Authorization for Distribution  Based upon the initial fee agreement  Anticipated amount to be collected  Deductions for expenses of litigation & attorneys’ feesCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 5
  6. 6. Typical Schedule of DistributionCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 6
  7. 7. Adversarial Proceedings  If the judgment debtor fails to respond to the collection letter, the judgment creditor may  Use the state court system to enforce a state court judgment  Use the state court system to enforce a federal court judgment, since the state has jurisdiction over the assets needed to satisfy the judgmentCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 7
  8. 8. Full Faith and Credit  The state court will recognize the validity of a federal decision (within its geographical boundaries)Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 8
  9. 9. The Collection Process  The state system will apply its own laws to the collection process  Execution  Levy  Garnishment  ReplevinCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 9
  10. 10. Replevin  A court process that permits the judgment holder to actually take back a specific item  Sometimes referred to as a court- ordered repossessionCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 10
  11. 11. Garnishment  Usually against wages  Permits judgment creditor to serve a debtor’s employer and the employer must usually deliver a portion of the debtor’s wages  States have many forms of garnishment rules and some states do not permit it at allCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 11
  12. 12. Levy  Process of identifying property which may be the subject of an execution sale  Levying is method of identifying the debtor’s claim against certain of the debtor’s property  Preliminary step leading to a sale of such propertyCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 12
  13. 13. Execution  Sale, usually at auction, of debtor’s goods to satisfy judgment  States have specific rules about how this process is conducted  Process is carried out by judicial officer, often a sheriff or constableCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 13
  14. 14. Uniform Enforcement of Foreign Judgments Act  Simple, uniform process of lodging foreign judgments for collection by a state court  A foreign judgment is  Any judgment, decree or order  From any court of the U.S. or other court entitled to full faith & credit (sister state court)Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 14
  15. 15. UEFJA  Requires  An authenticated or certified copy of the judgment  Usually docket entries  An affidavit stating the name & last known address of the judgment debtor  A filing fee  The foreign judgment becomes a judgment of that courtCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 15
  16. 16. Registering a Foreign JudgmentCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 16
  17. 17. Execution on the Judgment  The registered judgment can be collected by execution  In order to satisfy the judgment, a law enforcement officer can proceed against property of the judgment debtor by  Taking possession of it (seizing it)  Attachment  Sequestering  Levying against itCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 17
  18. 18. Exempt Property  Generally, execution can proceed against real or personal property  Some property is exempt, in order to afford the judgment debtor the means of continuing a trade, or for necessaries  Tools of the trade  A percentage of income exempt from garnishmentCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 18
  19. 19. Satisfying the Judgment  The debtor can pay the debt or the property may be sold  Costs of the sale are deducted from the gross proceeds – schedule of distribution  The remainder is given to the creditor  Sale nets more than the judgment – debtor is refunded the overage  Sale nets less than the judgment – creditor can proceed against additional property (deficiency)Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 19
  20. 20. Locating Assets  Interrogatories in aid of execution  Questions concerning location of the debtor’s assets  Addressed to banks, brokerage houses, other financial institutions  Paralegals can research  Public records for land transactions  Internet for stories of windfalls  Internet for employment informationCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 20
  21. 21. Judgment Proof Debtors  Usually researched as part of intake, the defendant’s assets are a factor in evaluating a case (cost/benefit analysis)  A debtor may ultimately prove to be “judgment proof”, perhaps because of a change in circumstances, and immediate collection is impossible due to lack of assetsCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 21
  22. 22. Post-Judgment Interest  Varies by jurisdiction, e.g.,  Not available  Tied to the market rate of interest  Set statutory amount  Justifies “waiting out” a judgment proof debtor  Must renew or revive the judgment according to the rules of the jurisdictionCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 22
  23. 23. Fair Debt Collection Practices Act  Protects the the debtor in collection of consumer debt  Personal, family, household purposes  Not a business debtCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 23
  24. 24. Interpretation of FDCPA and Law Firms Sayyed v. Wolpoff & Abramson, 485 F.3d 226 (4thCir. 2007) “[T]he FDCPA clearly defines the parties and activities it regulates. The Act applies to law firms that constitute debt collectors, even where their debt- collecting activity is litigation.”Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 24
  25. 25. Bankruptcy  Ability to collect from a debtor filing bankruptcy depends on the circumstances  Type of bankruptcy  Chapt. 7, liquidation – the debt may be settled under liquidation, according to the ratio of assets/debt  Chapt. 11, business reorganization  Chapt. 13, individual reorganization – the debt may remain valid under reorganization, although it might take longer to collectCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 25
  26. 26. Other Bankruptcy Outcomes  The petition could be dismissed  Can request a relief from the automatic stay  Once a petition is filed, no debts can be paid except through the court  Some debts are non-dischargeable (exempt)  If a stay is granted, collection efforts could continue despite the bankruptcyCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 26
  27. 27. Satisfaction  Once the debt is settled, it is important to file a notice of debt satisfaction  On the docket of the court of original jurisdiction  On the docket of each state court where judgment was lodgedCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 27
  28. 28. Satisfaction of Judgment FormCivil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.Goldman/Hughes 28
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