Collecting Damages After a Judgment in Your Favor
In Arizona (and throughout the country), even once you have secured a court judgment in your favor, the task is not yet complete — you must still collect the damages which you are owed by the defendant. The type of case is irrelevant to collection. Whether you were involved in a car accident lawsuit, or some other lawsuit, will have no effect on the procedure that you are required to follow.
Unfortunately, defendants can be challenging. Though in most cases the defendant will honor their responsibilities and — having lost the case — will pay the damages that you (the plaintiff) are owed, in some cases, the defendant will maneuver around the judgment and create roadblocks to collection.
The defendant may ignore your request for damages, costs, and legal fees. Alternatively, they may outright refuse to pay the judgment. As a general rule, these are a clever application of stalling tactics. If the defendant can stall for a long enough period of time, then they may be able to hide or otherwise relocate their assets so that you — as the judgment creditor — cannot seize them.
What can you do to ensure that you collect your damages in full, after a judgment has been entered in your favor?
Let’s take a look at some of your options.
What is a Court Judgment?
A court judgment is essentially a formal document that gives you, the successful plaintiff, the unrestricted right to seize the assets of the defendant in order to satisfy the damages owed to you. In Arizona, court judgments last for a long period of time — five years, running from the date that the judgment was entered) — to account for the difficulty in seizing assets that the defendant may attempt to hide or relocate. The judgment may also be renewed, if deemed necessary, by filing an affidavit of renewal with the court.
If the defendant makes collection difficult, and extends the collection process significantly, the judgment amount will accrue interest year-on-year.
There are many advantages to the judgment being made enforceable over a quite extended period, and two stand out as particularly useful for the typical plaintiff. These advantages are as follows:
- Assets may be seized when the defendant least expects it, years after they have “let their guard down,” so to speak, and
- You can wait until the defendant obtains sufficient assets to pay off the judgment before collecting.
Suppose, for example, that you have been awarded $250,000 in damages in a motor vehicle accident lawsuit. At the time of the lawsuit, however, the defendant has not been doing very well financially. They are unemployed and have few savings. They do not have sufficient assets to satisfy the judgment. If you were to attempt to collect, you would only be able to collect $30,000.
Now, imagine that you wait four or five years, and the defendant has secured a high-paying job and has invested well over the years. Their total assets are $300,000. If you attempt to collect, you can fully satisfy the amount owed on your original judgment. Even better: the defendant will owe you more due to the accrual of interest!
Seizing the Necessary Assets
When attempting to seize the assets of the defendant (in order to satisfy the judgment), perhaps the first issue you’ll run into is the defendant hiding or relocating their assets. For example, a defendant may — after losing a case and having a judgment entered against them — move significant assets “offshore,” into foreign accounts.
As the winning plaintiff (and thus, the judgment creditor), you are legally entitled to collect, but you cannot do so if you don’t know where the assets are! Third-party investigation may work, to an extent, but even better is filing for a Judgment Debtor’s Examination with the court. The Judgment Debtor’s Examination will compel the defendant to appear in court and answer truthfully as to the location of their various assets. The defendant will also be ordered not to relocate the assets further, and you will be granted a Writ of Execution by the court to seize said assets.
If the defendant has not attempted to hide or relocate assets, or if you know exactly where those assets are already, you may simply file a Writ of Execution (for personal property and other assets) or a Judgment Lien (for real estate property). This gives the county Sheriff — where the assets are located — the go-ahead to seize the assets on your behalf.
Arizona Limitations on Seizure
It’s worth noting that you cannot seize all assets. Some are “off limits,” so to speak. If the defendant does not have significant assets, and all they have left is their sole personal residence, you may have difficulty seizing the residence (and forcing a sale) — this is known as the homestead exemption. In fact, there are many other exceptional situations that may prevent you from collecting your rightful judgment. For this reason, it’s critical that you work with an experienced attorney who has a track record of success in securing the defendant’s assets on behalf of clients.
Contact a Skilled Phoenix Injury Lawyer Today for Assistance With Your Claims
Here at Hirsch & Lyon, our attorneys not only have decades of experience representing injured plaintiffs in motor vehicle accident litigation, but also have extensive experience handling the collection of monetary judgments — we are therefore well-positioned to identify and secure assets necessary to fulfill the judgment.
Call 602-535-1900 today to schedule a free consultation with a skilled Phoenix injury lawyer here at Hirsch & Lyon.