judgment creditor

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Judgment Creditor

A party to which a debt is owed that has proved the debt in a legal proceeding and that is entitled to use judicial process to collect the debt; the owner of an unsatisfied court decision.

A party that wins a monetary award in a lawsuit is known as a judgment creditor until the award is paid, or satisfied. The losing party, which must pay the award, is known as a Judgment Debtor. A judgment creditor is legally entitled to enforce the debt with the assistance of the court.

State laws provide remedies to a judgment creditor in collecting the amount of the judgment. These measures bring the debtor's property into the custody of the court in order to satisfy the debtor's obligation: they involve the seizure of property and money. The process of enforcing the judgment debt in this way is called execution. The process commences with a hearing called a supplementary proceeding. The judgment debtor is summoned to appear before the court for a hearing to determine the nature and value of the debtor's property. If the property is subject to execution, the court orders the debtor to relinquish it.

Because debtors sometimes fail to surrender property to the court, other means of satisfying the debt may be necessary. In these cases the law refers to an unsatisfied execution—an outstanding and unfulfilled order by the court for property to be given up. Usually this will lead the judgment creditor to seek a writ of attachment, the legal means by which property is seized. To secure a writ of attachment, the judgment creditor must first place a judgment lien on the property. Also called an encumbrance, a lien is a legal claim on the debtor's property that gives the creditor a qualified right to it. Creditors holding liens are called secured creditors. The writ of attachment sets in motion the process of a levy, by which a sheriff or other state official actually seizes the property and takes it into the physical possession of the court. The property can then be sold to satisfy the debt.

Occasionally the judgment creditor is frustrated in the course of enforcing a judgment debt. Debtors may transfer property to another owner, which makes collection through attachment more difficult. Liens on property usually prevent the transfer of ownership. Where a transfer of ownership has occurred, state laws usually allow the judgment creditor to sue the third party who now possesses the property. Some states provide additional statutory relief to creditors in cases where debtors fraudulently transfer assets in order to escape a judgment debt. Florida's Uniform Fraudulent Transfer Act (Fla. Stat. § 726.101 et seq.), for instance, allows creditors more time to pursue enforcement of the debt.

Another process for recovery is Garnishment, which targets the judgment debtor's salary or income. Through garnishment a portion of the judgment debtor's income is regularly deducted and paid to the judgment creditor. The creditor is known as a garnishor, and the debtor as a garnishee.

Further readings

Lippman, Steven N. 1996. "Proceedings Supplementary and Uniform Fraudulent Transfer Act: Dual Remedies to Execute Against a Judgment Debtor's Transferred Assets." Florida Bar Journal 70 (January).

judgment creditor

n. the winning plaintiff in a lawsuit to whom the court decides the defendant owes money. A judgment creditor can use various means to collect the judgment. The judgment is good for a specified number of years and then may be renewed by a filed request. If the defendant debtor files for bankruptcy, the judgment creditor will have priority (the right to share in assets) ahead of general creditors who are not secured by mortgages or deeds of trust and do not have judgments. However, if the bankrupt person has no assets, this becomes an empty advantage. (See: judgment, prevailing party, creditor's rights)

judgment creditor

the person who is named or ascertained in a judgment or order as being entitled to the benefit of it. The person liable to pay is the judgment debtor.
References in periodicals archive ?
If such person does make payment or transfer in disregard of the restraining notice, he takes the risk of liability for damages and contempt if the judgment creditor can establish that the debt was owed to the judgment debtor or that he had an interest in such property.
On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the limited liability company membership interest of the member with payment of the unsatisfied amount of the judgment with interest.
Additionally, the cour documents stated Snipes "may be subject to arrest and punishment for contempt of court, and the court may take an order requiring [him] to pay reasonable attorney fees incurred by the judgment creditor in the proceeding.
third-party permits the judgment creditor to recover damages if the
The most important, yet fraught, aspect of that collections procedure is the right of a judgment creditor to implead third parties into the already open and pending matter in which the judgment was entered.
A judgment from the court does not guarantee that the judgment creditor will be fully, or even partially, reimbursed.
that "if a judgment debtor does not currently have property in [the forum], a judgment creditor should be allowed the opportunity to obtain recognition of his foreign-money judgment and later pursue enforcement if or when the judgment debtor appears to be maintaining assets in [the forum].
Third, Mid-America's interpretation ran counter to the purpose of post-judgment interest, which was tailored to encourage payment, including partial payments, and to recompense a judgment creditor for money due him of which he has not had the use.
One judgment creditor of the borrower is a San Jose, California--based partnership.
If a final judgment remains unpaid for 30 days, the judgment creditor would have a choice of collecting on the appeal bond posted in their case, or having the stay against the appellant lifted.