This article is a general guide because laws change often. This is not a substitution for researching and keeping current with the laws of your state. While it is legal to enforce judgments in all 50 states, some states make it harder than it should be.
This PDF lists the judgment interest rates for each state, listed by state, however check the codes listed, to make sure the interest rate is still correct. www.cozen.com/cozendocs/Outgoing/charts/ChartOfTheMonth/Pre-Post/Judgment/Interest.pdf”.
In the beginning, it was one’s right to purchase a judgment and enforce it. Over time, government and legal organizations in some states, (usually a Bar Association) have or soon may try to, put restrictions on the rights of people (who are not a lawyers) to enforce a judgment.
Before reading further, note that if you use a lawyer, you do not need to be a collection agency. If you get a judgment assigned to you and you own it and then you hire a lawyer to enforce it for you (authorized to practice law in the state where the debtor lives), you are not doing any collections and can collect in any state. However, you are the client of the attorney so you will still need to finance the enforcement costs associated with the collection of the file.
The future-payment contingency purchase method is when the judgment enforcer pays the original judgment creditor an average of 50 percent of the amount recovered from the debtor.
The future-payment contingency purchase is usually best for the original judgment creditor because they get an average of 50% of the amount recovered from the debtor. In contrast, judgments purchased for cash up-front have average sale prices of 1% to 7% of the face value of the judgment.
Some states do not allow the standard future-pay purchase method. Such states have specified that judgments must be purchased outright with no continuing obligation. Other states have mandated that only a collection agency can enforce judgments for others.
In some states, instead of passing laws, there are “only” strong opinions of high-ranking legal organizations. Even if only an opinion, in courts, these opinions can affect the rights of judgment enforcers.
If you enforce judgments, you must check the laws of your own state. With that said, here is a general summary of the laws that impact how judgment enforcers must work in each state:
Alabama, Alaska, Arkansas, and California: No special restrictions. (Mobile Alabama seems hostile to JEs.)
Arizona and Colorado: To recover judgments, you should be a licensed as collection agency. Note that in Arizona, a corporation can represent itself in court.
Connecticut: No special restrictions.
Delaware: Some courts are hostile to JEs.
District Of Columbia: Government employees are not attachable. (The Feds protect their own.)
Florida: The opinion of the Florida Department of Banking and Finance is that to recover judgments, you should be a licensed as collection agency. But the Bar, and Florida state law, does not mandate this. In Florida, corporations can represent themselves in Small Claims court, for matters up to $5,000.
Georgia: Generally, few special restrictions. Some courts do not allow assignment of judgments as the Georgia Bar does not like people who enforce judgments, post judgment discovery is very limited, courts are slow.
Hawaii: Assignees Of Record cannot domesticate judgments into this state.
Idaho: To recover judgments, you should be a licensed as collection agency.
Illinois: No special restrictions.
Indiana: Most counties ok, however: Adams, Boone, and Hamilton Counties do not let JEs enforce judgments.
Iowa: The Iowa Bar Association says judgments must be purchased for cash up-front.
Kansas: Wage garnishments are not allowed by Assignees.
Kentucky: This state is Judgment Enforcer friendly. LLCs are covered by Kentucy Revised Statute 14A-020(3).
Louisiana and Maine: No special restrictions.
Maryland: The Maryland Department of Labor, Licensing and Regulation says judgments must be purchased for cash up-front.
Massachusetts: To recover judgments, you should be a licensed as collection agency.
Michigan: Small claims judgments cannot be assigned.
Minnesota: The Minnesota Department of Commerce says that you must either buy judgments for cash up front or be a licensed as collection agency.
Mississippi: No special restrictions.
Missouri: Small Claims judgments (3K and less) in this state cannot be Assigned. This might be raised to 5K soon.
Montana and Nebraska: No special restrictions.
Nevada: The Bar Association of Nevada says to recover judgments, you should be a licensed as collection agency or be a lawyer. Very hostile to pro-pers.
New Hampshire: No special restrictions.
New Jersey: The Bar Association of New Jersey says judgments must be purchased for cash up-front. To domesticate a foreign judgment, an exemplified copy of the original judgment is needed.
New Mexico and New York: No special restrictions. Note, that it is not simple or cheap to domesticate default judgments to NY. You must file a new lawsuit in NY to domesticate a default judgment, shame on NY. It does not matter how good the proof of service is, in NY, you must file a new lawsuit to domesticate a default state judgment in NY. Most agree you do not have to be a collection agency to enforce judgments you own in New Mexico if you buy them outright.
North Carolina: Wage Garnishments generally not allowed. Chapter 7 no asset BK, it does not matter if the creditor was listed or not, judgment is gone.
North Dakota, Ohio (Huron County courts don’t like pro-pers), Oklahoma, and Oregon: No special restrictions.
Pennsylvania: Wage Garnishments generally not allowed. Becoming more debtor friendly.
Puerto Rico and Rhode Island: No special restrictions.
South Carolina: Wage Garnishments generally not allowed.
South Dakota and Tennessee: No special restrictions, Tennsesse has no spousal wage garnishminent, see 26-106. Teneesee is not a commumity property state.
Texas: Wage garnishments other than child support are NOT allowed. However, non-wages are garnishable; i.e. 1099 wages are, bonus and other non-wage payments are garnishable.
Utah, and Vermont: No special restrictions.
Virginia: The Bar Association of Virginia says judgments must be purchased for cash up-front.
Washington and West Virginia: No special restrictions.
Wisconsin: The Wisconsin Department of Financial Institutions says to enforce judgments you must be a licensed as collection agency.
Wyoming: No special restrictions.