Oftentimes, in a family law case, a court will enter a judgment for a certain amount of money in favor of one party and against the other. These judgments may come in many forms: attorneys’ fees, back child support, property settlements, or even sanctions. A judgment, of course, is not the same thing as cash in hand, and savvy litigants frequently engage in tactics designed to make judgments against them as uncollectable as possible. The law, however, provides judgment holders with several mechanisms to enforce their judgments. A few are discussed below.
First, section 2-1402 of the Code of Civil procedure allows a judgment creditor to satisfy his or her judgment through a supplementary proceeding called a “citation to discover assets.” This process allows a creditor to seek financial discovery both from the debtor, as well as any third-parties (such as financial institutions, family members, or others) holding assets of the debtor. A third party who fails to comply with such a citation may find itself in contempt of court or even liable for the full amount of the underlying judgment. Once a debtor’s assets are discovered, the court can order the asset holder (i.e. the debtor or a third party) to turn over the assets in question to the judgment creditor.
Second, where a judgment debtor is employed, the law authorizes a creditor to initiate a wage garnishment proceeding, one which allows the creditor to intercept a portion of a debtor’s wages directly from his employer to satisfy a judgment. Garnishment orders are subject to certain limitations preventing a creditor from garnishing more than a certain percentage of a debtor’s disposable earnings.
Finally, particularly unscrupulous parties may transfer assets out of their own names in an effort to frustrate potential (or actual) creditors. Typically, a party facing a judgment will transfer money to a parent or a new spouse in order to prevent collection. Thankfully, the law provides a remedy for this, as well. Uniform Fraudulent Transfer Act (“UFTA”), allows creditors (including parents with claims for past-due child support) to sue transferees who accept property from a debtor under fraudulent circumstances. Such circumstances arise, for example, where the transaction lacks sufficient consideration, where a debtor divests himself of virtually all of his assets, or where the transfers occurred in close proximity to an adverse judgment.
While generally effective, these enforcement mechanisms can be time-consuming and costly. Debtors can make collecting a judgment extremely difficult, and a judgment holder should conduct a serious cost-benefit analysis with his or her attorney before attempting to collect.
Matthew D. Elster, Partner
For more information on Mr. Elster, please visit: www.beermannlaw.com/team/matthew-d-elster.