ANATOMY OF A LAWSUIT – Part VI.
Now that you have a judgment in your favor, you need to collect it. Any judgment can be appealed within twenty (20) days. Therefore, it is not a final judgment until twenty days after the date of judgment.
If the losing party had insurance coverage, then collecting should not be a problem. The insurance company writes you a check and you then, after the check clears, file a “Satisfaction of Judgment” with the court and the case is over.
If there is no insurance, and the losing party does not voluntarily pay you what the judge ordered, then you have to look at your post judgment remedies. One of those remedies is a judgment lien. If the losing party owns real estate, you can file a judgment lien against all of their real estate. A judgment lien is filed in the Town Clerk’s office in the town in which the property lies and is notice to anyone and everyone that may be interested in that property that you have a lien against that property which will have to be satisfied before the owner, the losing party in the lawsuit, can sell or refinance it. The judgment lien is good for twenty (20) years unless it is a small claims judgment, then the lien is only good for ten (10) years. Should the losing party try to sell or refinance their real estate before the expiration of the lien, they will not be able to do so without contacting you and paying you what you are entitled to. Once you are paid, you can release the lien and they can do as they wish with the property. If you were awarded post judgment interest by the court, you will also be able to recover interest on the outstanding debt until it is paid in full.
If you have a judgment lien on the property, you can elect to foreclose it, however, it usually is not cost effective to do so depending on the amount of the prior liens, the equity in the property and the type of property it is. Foreclosure, although available, is a costly process that can backfire. For example, if the property is the debtor’s primary residence and they file bankruptcy they may be able to get your lien removed from the property and you will have expended more money to no avail. Prior to foreclosing a judgment lien, it is very important you understand the risks involved and then make an educated decision. For example, if you have a $5,000.00 judgment lien against someone’s primary residence, you can invest another $5,000 to $8,000 into the foreclosure process and then the debtor can file bankruptcy, discharge your debt and you get nothing. Not a good outcome!