I am a judgment broker, not a lawyer. This is my opinion and a summary of what I have learned and observed. If you need legal advice, contact a lawyer (See our National Lawyer State Bar List).
Foreign judgment domestication sometimes describes the process of domesticating international judgments from another country into the US. Most often, foreign judgments describe moving a judgment from one State’s Court system to another. This is also known as the domestication of a sister state judgment.
It does not matter where you are, what matters is domesticating your judgment into another state where your debtor has assets; to obtain writs of execution from the court so that the Sheriff can levy your judgment debtor’s available assets.
Other kinds of foreign judgment domestications are the registration of federal judgments, and the confirmation of foreign arbitration awards. “You catch a wild judgment and domesticate it.”
Sometimes you can reach a debtor’s assets without domesticating a judgment, with tools such as assignment orders, turnover orders of third-parties that are holding the debtor’s assets, and charging orders against LLCs. However, for most common enforcement actions, such as a levy, you have to domesticate the judgment to the State where the debtor’s assets are.
What happens after you domesticate a judgment? More than one thing happens:
1) It allows you to enforce a judgment against the debtor’s assets with a levy in the state where the assets are.
2) It also costs you money and/or time.
3) After domestication, does the judgment earn interest at the original state’s interest rate, or does it earn interest at the rate in the new state? Logically, it would earn interest at the new state rate. However, in many states and courts, the interest rate will be calculated at the original state rate. In some courts, they let you calculate the interest at the new state rate.
If it is a Federal judgment, it keeps the original interest rate. If it is a State judgment, then when it is domesticated into the new state, it has the new state’s interest rate. Of course, when is domesticated, you document and add the old accrued interest from the old state.
4) It also serves notice to the debtor by mail, that you are domesticating the judgment. This takes away the element of surprise, which is often the most important element of a successful judgment recovery.
5a) It also gives the debtor a small chance of vacating the judgment within 30 days of being served. Make that 40 days, just to be sure because courts give extra time to allow for possible delays of first-class mail.
5b) Note that (in most States) the debtor’s ability to try to vacate the judgment does not stop you from enforcing the judgment as fast as you want. However, if the debtor persuades a judge to grant their proposed motion to vacate the judgment, you must give them all their money back, and sometimes more. Check the laws of your State. Some situations and States require you to wait before enforcing the judgment.
5c) Usually, the debtor’s attempt to vacate a judgment does not work. When it does work, it is usually because they persuaded a judge that they were not properly served. There are other reasons the debtor may be able to try to use, such as a pending motion to vacate (or an appeal, or another type of motion) in the original court.
In my opinion, it is usually harder and more expensive to domesticate judgments than it should be. In some States, such as California, domesticating a judgment is basically starting a new lawsuit, which costs more than $300.
Note that every State, even those that have adopted the federal “Uniform Foreign Money Judgments Recognition Act”, has its own rules and fees. Even within the same State, each County may have its own local rules. Check the local requirements in the County where you will be domesticating the judgment to. The best County to domesticate the judgment is where the debtor’s assets are.
Some people hire attorneys to domesticate judgments. Others do it themselves. If you are in doubt, hire an attorney.
The first step is to determine the requirements of the local court. Many courts (the one you wish to domesticate the judgment to) require a copy of the original judgment to be certified and/or exemplified (having a seal) and signed by a clerk of the original court. A certified copy of the judgment is signed by a judge. An exemplified copy is a triple seal judgment, that has the signature of a judge, the seal of the court, and a certification of the authenticity, signed by a court clerk.
After you pay the original court, it may take a while for the court to provide you a copy of the certified or triple seal judgment.
When you get the copy from the original court, you then pay the new court, and file an affidavit with the judgment copy. Make sure you include the names and last known addresses of all parties to the judgment. Then you send by certified mail, a copy of everything to all parties on the judgment.
It is important to determine the correct address of the debtor. This provides both a good proof of service, and may help later to free the judgment debtor of enough assets to pay off your judgment.
Some States have short statute of limitations on how long you have to domesticate a judgment. Other States will not let you domesticate default judgments. In such States, a solution is you might be able to re-sue the debtor for the original judgment and debt in the new State.
Family or support judgment domestications sometimes require a new lawsuit in the new State.
Federal judgment domestications are different. They do not have to be served on the debtor, and must be registered in a Federal district court in the new State. (28 USC 1963).
International judgments can be domesticated as per the “Uniform Foreign Money Judgments Recognition Act”.
Domestication of international judgments require a new lawsuit in the court in the new State. Check the statute of limitations for how long you have to domesticate an international judgment in your State.
Domestication of international arbitration awards must be done in a Federal district court. If the award is not in English, a certified translation must accompany the petition. Once confirmed, the award is entered as a federal district court judgment and is enforceable as a federal judgment.
If you are a judgment enforcer, do not file your assignment of judgment in the new state until the judgment has been successfully domesticated into that new state, and the time limit for the judgment debtor to oppose the domestication has passed.
After you have domesticated a judgment to a new State, do not forget that you must keep the original judgment alive (renewed) in the original State. You must keep in mind the chances of recovery. If the debtor has no assets, there may not be much reason to domesticate a judgment.