Judgment Enforcement and Collection
Q: A New Mexico court issued a money judgment in my favor and against a particular defendant. Does this mean that I am guaranteed to receive payment of the judgment amount?
A: No.
Q: Why not?
A: Lots of reasons. As just a few examples:
The “judgment debtor” (the person or company who owes you money pursuant to the court judgment) might not have the funds needed to pay the judgment.
The judgment debtor’s assets may be in the form of illiquid assets (like real estate) that are not easily converted into cash.
The judgment debtor’s assets might already be claimed by someone with a “superior” (first in line) lien or other interest in the assets.
The judgment debtor may file for bankruptcy — which doesn’t automatically mean that your judgment is worthless, but may mean that you need to take certain steps in the bankruptcy proceeding to protect your interests as a “judgment creditor.”
The judgment debtor may die — which also doesn’t automatically mean that your judgment is worthless, but may mean that you need to take certain steps in the probate proceeding to protect your interests as a “judgment creditor.”
Finally, the judgment debtor may simply prefer to avoid paying the judgment, let time go by, and potentially move assets around to make it harder for anyone to enforce the court judgment.
Q: What do you mean by saying that the judgment debtor “might not have the funds needed to pay the judgment” ?
A: With a few exceptions that I am not attempting to analyze here, a court in a civil case is not going to force a defendant to pay more than the defendant actually has. There is no “debtor’s prison” in modern American law. For a rough illustration, if you obtain a judgment against someone for $100,000 (one hundred thousand dollars), but that person only has $10,000 (ten thousand dollars) in assets, the most you can collect from that person is ten thousand dollars (hypothetically speaking).
Q: If the judgment debtor doesn’t have enough cash or other assets to get my judgment paid, will the Court pay the difference?
A: No.
Q: Suppose that the judgment debtor files for bankruptcy. Will the bankruptcy court give my judgment special treatment, and get it paid first?
A: Not necessarily. There are many factors that determine how different types of creditors are treated in a bankruptcy proceeding. And even if a particular creditor is “first in line,” so to speak, that doesn’t mean there will be judgment-debtor assets available to pay the judgment.
Q: You seem to write long-winded answers. Are you able to give short answers to questions?
A: Yes.
Q: Are you sure?
A: No.