I am not a lawyer, I am a Judgment Broker. This article is my opinion, and not legal advice. If you ever need any legal advice or a strategy to use, please contact a lawyer.
What is a judgment debtor? A judgment debtor is a person or an entity, that was involved or named in a lawsuit, and was judged to owe money because of a final judgment.
After a judgment is satisfied or vacated, then the person or entity is no longer a judgment debtor, at least not for that judgment.
Usually, a judgment debtor was a defendant in a lawsuit. However, sometimes the judgment debtor started as the plaintiff; and at the hearing, a judge decided not only did the original defendant owe nothing; the plaintiff is now the judgment debtor, that now owes money to the original defendant.
A person (or entity) can become a judgment debtor after many kinds of court judgments from either civil or criminal courts.
Many types of courts can create judgment debtors, including criminal restitution, divorce, small claims, limited and unlimited civil, bankruptcy, federal, justice, municipal, circuit, and district.
Unlike a debtor with a claimed debt against them, a judgment debtor has a judgment against them. The disputable claim was turned into a judgment. After a debtor is sued, and a court orders a judgment against them, their debt is decided with finality by a judge, to create a judgment debtor.
Only a judgment from a court can create an actual judgment debtor. UCC liens, and any other kind of debt or financing statements alone, cannot create a judgment debtor.
Becoming a judgment debtor is very common, and being one has not been any kind of social stigma for many decades. Many laws protect judgment debtors. An example is that with very few exceptions, a creditor cannot tell anyone else about a judgment debtor’s debt.
The courts, media, laws, and society; all seem to treat judgment debtors as if they are now victims, and that creditors are no better, and usually much worse than judgment debtors. What should be remembered is that many judgment debtors either stole something or money, received unjust enrichment, defrauded someone, damaged property, injured someone, etc.
When you are a judgment debtor, you may have some choices. Certain laws make it relatively difficult and expensive to recover judgments, so one choice is to at least temporarily, ignore a judgment.
If you are poor, ignoring a judgment might make sense, because only the judgment debtor’s assets or income streams may be levied to satisfy a judgment. However, not paying a judgment or arranging a modest payment plan, may expose you to unexpected and sometimes repeated bank or wage levies.
When the amount owed on a judgment is not huge, it may be cheaper and easier, to simply repay what is owed, in exchange for a notarized satisfaction of judgment that must be filed at the court.
As a judgment debtor, you can try to settle with the judgment creditor, perhaps reaching a compromise with them.
Especially when judgments are new, some creditors imagine that their judgments are guaranteed, and will never settle them for anything less than every penny owed, including all interest and court-approved costs.
Usually, judgments eventually expire. However, in most states, a determined judgment creditor can renew a judgment indefinitely.
Sometimes a judgment creditor will not give up, and hires a collection lawyer, or assigns their judgment to a judgment recovery expert. Recovery experts specialize in finding judgment debtor assets, and then having a Sheriff levy them, to satisfy the judgment.
When a judgment debtor has assets and a determined creditor or enforcer is constantly trying to have a Sheriff levy their bank accounts, wages, and property; being a judgment debtor is not fun.
The two most common ways that judgment debtors may avoid paying a judgment, is either with bankruptcy protection, or if they win their attempt to vacate a default judgment.
For judgment debtors, satisfying a judgment, by reaching an agreement with the judgment creditor, or someone owning a judgment, can make a lot of sense.