After judgment is obtained in a civil case, many defendants are unable, or unwilling to simply pay the judgment in full.  Technically, it is the plaintiff’s job to get the judgment paid.  There is no penalty to the defendant for failing to take affirmative steps to pay the judgment.  Thus, as many sad litigants have discovered, a judgment that goes uncollected is nothing more than a piece of paper.

There are several avenues a judgment creditor can take to collect on its judgment.  The first step is usually to investigate the financial condition of the judgment debtor, in an effort to ascertain available assets.  In that regard, the creditor will typically sit the debtor down for a creditor’s examination, which obligates the debtor to provide documents, including bank statements, tax returns, pay stubs and so forth, to divulge the debtor’s assets.  After locating assets, the creditor will utilize a number of court procedures to facilitate the transfer of the debtor’s assets to the creditor.

Sophisticated organizations, such as banks, have systems in place to deal with this transfer of assets.  For example, a creditor who locates a debtor’s bank account can get a court-issued garnishment request form sent to the bank in which the account is held and the bank will hold the funds for the creditor.  If the debtor does not take action in court within a specified period, the bank will simply cut the creditor a check out of the debtor’s bank account, up to the full amount of the judgment.  This is called a non-periodic garnishment – the one-time seizure of funds belonging to the debtor.

Another type of garnishment is a periodic garnishment.  That is, the repetitive seizure of funds belonging to the debtor.  The most common type is the garnishment of the debtor’s wages.  When the debtor’s employer receives a garnishment request form, the employer must serve a copy of the form to the debtor within 7 days and fill out and submit the form to the creditor and the court within 14 days.  The form must divulge whether, and to what extent, the employer is liable to make payments to the debtor.

If an employer fails to strictly comply with the garnishment rule, the penalties are absurdly harsh.  A creditor can get a judgment against the non-complying employer for the full amount of the judgment that it obtained against the debtor.  

Recently, one of my clients, a family owned and operated restaurant, received a garnishment form, regarding a cook who worked there years ago for a week or two.  The cook apparently had defaulted on an auto loan 10 years prior and the lender obtained a judgment against him in 2003.  By the time my client received the garnishment form, the cook hadn’t worked at the restaurant for nearly two years.  My clients picked up the phone and told the creditor’s attorney this fact.  They filled out the form and mailed it to the attorney.  They did not file it with the court as required.  Shortly thereafter, the creditor’s attorney obtained a default judgment against my client for $22,000.00.  Court officers then came to my client’s business, threatening to shut it down, unless my client paid the full amount of the judgment.

Eventually, the matter was sorted out in court.  However, this story presents an important lesson to businesses.  Whenever you receive a legal document, even if you think it’s a simple misunderstanding, call an attorney and get some legal advice.  

— Kassem Dakhlallah is a partner with Jaafar & Mahdi Law Group, P.C.  His practice focuses on complex litigation, including class actions, representative actions, commercial litigation, civil forfeiture and personal injury. He can be reached at (313) 846-6400 and kassem@jaafarandmahdi.com.