When someone files a lawsuit, they expect to get paid after they win. Many think getting a judgment equates to payment and are shocked to find judgment only opens the door to collection. Payment of the judgment is not automatic and both Florida and U.S. Constitution prohibit imprisonment for debts. If the loser does not voluntarily pay a judgment, the winner has to pursue additional legal action to collect. In many cases, the loser does not have any money or assets to pay the judgment. That is only confirmed after spending additional money chasing the loser.
Litigation is expensive. Just getting to judgment often requires substantial investment in attorney’s fees, court costs and might even require expert witness fees. Attorney’s fees are only recoverable if provided by contract between the parties or statute, which means attorney’s fees obtaining a judgment are not recoverable in a large percentage of cases. The legislature believes that once a judgment is obtained, there is no doubt about liability, the amount owed and who should get paid. Section 57.115 Fla. Stat. provides that a court may award reasonable costs and attorney’s fees of post–judgment collection against the judgment debtor, but even that is little solace if the judgment is uncollectible.
There are two primary methods for collecting a judgment. One is levy and sale; the other is garnishment.
Levy and sale are exactly as they sound. A judgment creditor obtains a writ of execution from the Clerk of Courts. The writ is delivered to the Sheriff for the Sheriff to levy anything that is a hard asset. That includes land, tangible personal property and similar items that can be touched or held and are not representative of an interest in something else. The writ cannot generally be used against financial accounts or debts of third parties to the debtor.
Chapter 56 of Fla. Stat. sets out the procedural requirements for collecting a judgment through a writ of execution. The judgment holder delivers the writ to the Sheriff and the Sheriff is to levy on a specific property. The property must be described in the writ of execution, or more commonly, in separate instructions from the judgment holder. The judgment holder must also give the Sheriff a certified copy of a judgment lien certificate filed with the Department of State and an affidavit.
The affidavit is a sworn statement by the judgment holder or the attorney of record listing all other judgment lien certificates that have been filed with the Department of State, the date of filing of each showing the judgment holder’s claim is superior and stating the judgment holder does not believe the value of the property to be levied will exceed the judgment debt. Efforts to levy on real property requires even more information in the affidavit.
The Sheriff serves the writ and that is the levy. Some Sheriffs will take property into actual custody. Some may leave the property in place. The latter is particularly true with large and unwieldy items. The Sheriff does not search for the property. It behooves the judgment holder to tell the Sheriff where the property is located. The Sheriff is entitled to get paid for expenses incurred of the levy and safekeeping. Those expenses can include processing fees and a surety bond to protect the Sheriff from claims of wrongful levy. There are procedures for the debtor or other persons with an interest in the property, ownership or otherwise, to challenge the execution.
The cost of this procedure means no judgment holder wants to levy and sell personal property that is of little value. Assets which have liens against them, such as cars, are also of little interest because they have little equity. Jointly owned property, particularly assets owned jointly by a husband and wife, are difficult or impossible to take and sell via writ of execution. These problems may leave many debtors no assets for which a writ of execution makes no sense.
If there is no successful challenge to the writ, the Sheriff ultimately sells the property at public sale. Notice of the sale must be published in the newspaper and provided by certified mail to the judgment debtor. The judgment creditor is liable for the Sheriff’s costs of the sale. After the sale, the Sheriff applies the proceeds to unpaid expenses of the Sheriff, then to the judgment creditor, possibly to claimants and if there is anything left over, that goes to the judgment debtor.
The other primary method for collecting a judgment is garnishment. Garnishment is a procedure under which the judgment holder gets someone who owes the judgment debtor money to pay that money to the judgment holder instead of the debtor. Garnishment can be effective against wages, bank accounts, stock brokerage accounts, tenants owing rent to the judgment debtor, landlord’s holding security deposits and anyone else owing money to the judgment debtor.
Garnishment procedure is relatively simple. The judgment holder pays a small fee and files a motion with the Clerk of Courts for a writ of garnishment and arranges service of the writ on the person who owes money or is holding money of the judgment debtor. There is no hearing or trial and the writ is issued quickly. The judgment debtor is not given any notice until after the writ is served. If the judgment debtor knew the garnishment was coming, he or she would likely take the money out of the bank or otherwise try to get payment from the third-party before the writ was served. The judgment holder must send the debtor notice of the writ by the later of five business days after it is issued or three business days after it is served.
A person served with the writ of garnishment (garnishee) becomes potentially liable to the judgment holder for the value of anything that person owes the judgment debtor between the time it is served and the time it files an answer to the writ. Answer is due within twenty days after service of the writ. The answer to the writ states what asset is held or owed to the debtor. Within five days of receipt of the answer, judgment holder must send a copy of the answer to the judgment debtor.
The judgment debtor or anyone listed as having an ownership interest in the garnishee’s answer may file a motion to dissolve the writ. There are a lot of reasons a garnishment writ can be dissolved. Florida law makes wages of the head of a household exempt from garnishment. Federal law places limits on the percentage of wages that can be garnished, even for non-head of household and also prohibits garnishment of certain federal benefits such as social security. Florida has other exemptions. Jointly owned assets with a spouse are problematic. Florida caps the amount a garnishee can hold at two times the judgment. The judgment debtor can also challenge the writ on technical procedural grounds, which is often successful when the judgment debtor is not pursuing garnishment with an experienced attorney.
Collecting a judgment is not simple or guaranteed. It can be an expensive and a time–consuming process. That makes it important to consider potential for collection before filing suit.
William G. Morris is the principal of William G. Morris, P.A. William G. Morris and his firm have represented clients in Collier County for over 30 years. His practice includes litigation and divorce, business law, estate planning, associations and real estate. The information in this column is general in nature and not intended as legal advice.