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 ?
' The judgment creditor is hereby granted leave to enforce the judgment of this court via a way of execution.
The problem was that another judgment creditor, Developers Surety and Indemnity Co., learned about the settlement and demanded that the firm pay it from the settlement proceeds.
The judgment creditors were listed by name in the Confirmation Order, compounding the inferred impression they were in agreement.
According to the law, unless evidence to the contrary is provided, the donation, transfer or encumbrance of a property were made to defraud the judgment creditor. The burden of proof in such cases is on the debtor in addition to the person acquiring the property, who must show he acted in good faith.
If any of your property has been levied on and you choose to oppose the application of the property to be applied toward the satisfaction of the judgment, then you must furnish a bond with surety to be approved by the officer in favor of the judgment creditor. The amount of the bond must be double the value of the goods claimed as the value is fixed by the officer and conditioned to deliver said property on demand of said officer if it is adjudged to be the property of the judgment debtor and to pay the judgment creditor all damages found against you if it appears that the claim was interposed for the purpose of delay.
all the rights, remedies and powers of a judgment creditor holding an execution duly returned unsatisfied." (The grant of hypothetical judgment lien creditor rights to the trustee is hereinafter referred to as Creditor-Mirroring Rights and Powers.) The section appears to have been the initial predecessor to the strong arm provision.
included the claims of the judgment creditor whose maritime attachment
The remedy of terceria is available to a third-party claimant or to a stranger to the foreclosure suit against the sheriff or officer effecting the writ by serving on him an affidavit of his title and a copy thereof upon the judgment creditor, and
When collection will be more of a challenge, the judgment creditor's attorney must be creative and resourceful.
In contrast, with a C or S corporation, a judgment creditor may be able to seize the debtor's corporate stock and force a sale or liquidation to satisfy the judgment.
(e) This section provides the exclusive remedy that a judgment creditor of a member's distributional interest or a member's assignee may use to satisfy a judgment out of the judgment debtor's interest in a limited liability company.
Rather, the burden is on the judgment creditor, the party who has won, to enforce the award against the judgment debtor in order to collect.