judgment creditor

Also found in: Financial.

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 ?
all the rights, remedies and powers of a judgment creditor holding an execution duly returned unsatisfied.
jurisdiction afforded to maritime judgment creditors within the United
4th DCA 2016), illustrates how a judgment creditor can acquire a judgment debtor's claim against a third party.
The theory is that a judgment creditor who has a charging order will receive a Form K-1 from the LLC, which is taxed as a partnership, and be responsible for the distributive share of LLC profits even if the LLC makes no distributions to the creditor.
However, if the proceeds are not adequate for the repayment of the whole mortgage debt and the expenses of the sale, the judgment creditor is liable for the shortfall; the court may order the shortfall to be added to the sum of the judgment debt as execution costs.
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.
Finally, the court noted that "California enforcement law authorizes a court to 'order the judgment debtor to assign to the judgment creditor all or part of a right to payment due or to become due, whether or not the right is conditioned on future developments.
Not only does the "hider" always have an advantage over the "seeker," but also the odds and financial balance are stacked against the judgment creditor on almost every level.
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
This provision, enacted by Congress in 2008, was said to allow a judgment creditor to execute against "any property interest of a foreign state".
Additionally, the insurer must send a copy of the notice simultaneously to the attorney or representative of the claimant or judgment creditor.