Judgment Debtor

Definition

A judgment debtor refers to an individual or entity against whom a court has rendered a judgment for the payment of a debt or monetary award. This typically arises when the debtor fails to satisfy the financial responsibilities that led to the lawsuit. Once the court issues a judgment and the debtor does not pay the awarded amount, the creditor (known as the judgment creditor) can employ various legal methods to enforce and collect the judgment, such as wage garnishment, property liens, or bank account levies.

Examples

Non-Payment of Rent: If a tenant (Abel) fails to pay rent, a landlord may go to court to seek a judgment for the unpaid rent. If the court rules in favor of the landlord and Abel fails to satisfy this judgment, Abel becomes the judgment debtor.
Unpaid Credit Card Debt: If Lisa defaults on her credit card payments, the credit card company can sue her for the amount owed. If the court sides with the credit card company and orders Lisa to pay, she becomes a judgment debtor until the debt is paid.
Business Debt: A small business called XYZ Inc. can’t pay its supplier for goods received. The supplier sues and obtains a court judgment against XYZ Inc. XYZ Inc. is now a judgment debtor until the judgment is fulfilled.

Frequently Asked Questions

1. What happens if a judgment debtor doesn’t pay the judgment?

If the judgment debtor fails to pay the judgment, the judgment creditor can use legal enforcement methods, including wage garnishment, property liens, or bank levies, to collect the amount owed.

2. Can a judgment debtor negotiate payment terms?

Yes, often a judgment debtor can negotiate payment plans or settle for a lesser amount with the judgment creditor to satisfy the judgment.

3. Does being a judgment debtor affect credit scores?

Yes, an unpaid judgment can significantly affect a debtor’s credit score and can remain on the credit report for up to seven years.

4. Can bankruptcy discharge a judgment debt?

In some cases, bankruptcy can discharge certain types of judgment debts, but it depends on the nature of the debt and bankruptcy laws.

5. How long is a judgment valid?

The validity period of a judgment depends on state laws, but it typically ranges from 5 to 20 years. Judgments can often be renewed before they expire.

Judgment Creditor: The individual or entity who has obtained a court judgment against the debtor, seeking recovery of the owed amount.
Wage Garnishment: A court-ordered procedure where a portion of a judgment debtor’s wages is withheld by the employer to pay the debt.
Property Lien: A legal claim against a judgment debtor’s property as security for the debt owed to the judgment creditor.
Bank Levy: A legal seizure of a judgment debtor’s bank account funds to satisfy a debt.
Default Judgment: A binding judgment in favor of the plaintiff when the defendant fails to respond or appear in court.

Online Resources

References

American Bar Association (ABA). “Judgment Enforcement”. Retrieved from ABA website
Nolo. “Enforcing Court Judgments: What You Need to Know”. Retrieved from Nolo website

Suggested Books

“Judgment Enforcement: Practice and Litigation” by Lori Antonelli: A comprehensive guide on judgment enforcement strategies and the litigation process.
“Debt Collection Hacks: Defeat Judgment Debtors without Going to Court” by Zachary Francis: Practical methods for enforcing debts outside of traditional legal processes.
“Creditors’ and Debtors’ Rights: General Principles” by Richard Kalish: A detailed explanation of creditor and debtor rights, focusing on the legal processes surrounding court judgments.

Real Estate Basics: Judgment Debtor Fundamentals Quiz

### Who is a judgment debtor? - [x] The individual or entity ordered by the court to pay a debt. - [ ] The lawyer representing the debtor. - [ ] The person seeking to collect the debt. - [ ] The court clerk. > **Explanation:** A judgment debtor is the individual or entity that the court has ordered to pay a debt but has not yet done so. ### What does a judgment creditor do? - [ ] Pays the judgment debtor. - [x] Seeks to collect the debt from the judgment debtor. - [ ] Represents the judgment debtor in court. - [ ] Manages the judgment debtor’s finances. > **Explanation:** A judgment creditor is the party who has obtained a judgment in their favor and is seeking to collect the owed amount from the judgment debtor. ### Can a judgment debtor negotiate a payment plan for the debt? - [x] Yes, they can often negotiate with the judgment creditor. - [ ] No, negotiation is not allowed once the judgment is entered. - [ ] Only in federal cases. - [ ] Only with court approval. > **Explanation:** Judgment debtors can often negotiate payment plans or settlements with judgment creditors to satisfy the debt. ### What is wage garnishment in the context of judgment debt? - [ ] An agreement to pay the debt in installments. - [x] A court-ordered method where part of the debtor’s wages is withheld by the employer to pay the debt. - [ ] Charging interest on the unpaid debt. - [ ] Voluntary deduction from a checking account. > **Explanation:** Wage garnishment is a legal procedure where part of a debtor’s wages is withheld by the employer and directed to pay off the debt. ### How long can a court judgment affect a debtor’s credit score? - [ ] 1 year - [ ] 3 years - [x] Up to 7 years - [ ] Indefinitely > **Explanation:** A judgment can remain on a credit report for up to seven years, negatively impacting the debtor’s credit score. ### What does a property lien entail? - [ ] Seizing all personal belongings. - [x] A legal claim on the debtor’s property as security for the debt. - [ ] Cancelling all property-related taxes. - [ ] Foreclosing the property immediately. > **Explanation:** A property lien is a legal claim on the debtor’s property, which serves as security for the debt until the debt is paid. ### Can filing for bankruptcy discharge a judgment debt? - [x] Sometimes, depending on the nature of the debt and bankruptcy laws. - [ ] Always, regardless of circumstances. - [ ] Never, under any condition. - [ ] Only for business debts. > **Explanation:** Bankruptcy can potentially discharge certain types of judgment debts depending on the specific bankruptcy laws and the nature of the debt. ### What is a bank levy in the enforcement of a judgment? - [x] A legal seizure of a debtor’s bank account funds to pay the debt. - [ ] Opening a new bank account for the debtor. - [ ] Voluntary deduction from the debtor’s paycheck. - [ ] Adjustable loan against the debtor's property. > **Explanation:** A bank levy involves the legal seizure of a debtor’s bank account funds to satisfy the court-ordered judgment. ### What might extend the validity of a court judgment? - [x] Renewal before expiration, depending on state laws. - [ ] Immediate payment of the debt. - [ ] Relocation of the judgment debtor. - [ ] Independence of the judgment creditor. > **Explanation:** Some states allow the judgment creditor to renew judgments before they expire, thereby extending their validity. ### What is the primary difference between a judgment debtor and a judgment creditor? - [ ] One is for criminal, the other for civil cases. - [ ] Both refer to the same party in debt litigation. - [x] Judgment debtor owes money, while judgment creditor is owed money. - [ ] Judgment creditor owes a duty of care. > **Explanation:** The judgment debtor is the party who owes money according to the court judgment, whereas the judgment creditor is the party who is owed money.