Judgement Collection in Pennsylvania. Why is it so hard?

High Swartz LLP

While obtaining a favorable judgment results from prolonged and costly efforts, collecting a judgment is arguably even more arduous.

Clients are often puzzled and even disappointed to realize that winning a case merely earns them a judgment in their favor. But when it comes to judgment collection, it's another matter. So, they're left asking what the point of months of litigating was? What was the point of all the confrontation? All the expense of hiring a litigation lawyer?

For example, a plaintiff or an aggrieved party who initiates a lawsuit can spend months, even years, litigating to obtain relief for incurred damages. Or a homeowner can toil in court for months trying to evict a delinquent tenant who has failed to pay rent. A company, too, can fight and fight for compensation when a former business partner refuses to honor a contract.

Litigation plows on, with seemingly no end in sight. Finally, after what seems like half a lifetime, the court schedules a trial, and the plaintiff appears in court against its adversary. The plaintiff argues his case, and after a tense trial, wins the case. The plaintiff is thrilled to learn that the relief he sought months, even years prior, is imminently obtainable. Clients tend to believe that the moment the jury (or judge, if a bench trial) announces a verdict in their favor, they are just minutes away from walking out of the courthouse with a check in their hand.

Unfortunately for those clients, nothing could be further from the truth.

Judgment Collection Differs Greatly from a Verdict

The party assessed the judgment (known as the judgment-debtor) often takes great lengths to avoid relinquishing assets to the successful litigant (known as the judgment-creditor). So, what does a judgment creditor do next, after spending considerable time, money, and resources, when it finally wins a lawsuit?

First, it is critical to understand that a verdict is different from a judgment. Pennsylvania law recognizes that a judgment is an official entry of a ruling or decision of the trial judge upon the docket.[1] You can collect on a judgment, not on a verdict.

Because a judgment and verdict are different, it is critical that the judgment-creditor "convert" a verdict or other determination of the court, which finally determines the parties' rights and obligations, into a judgment. This action requires filing a "Praecipe to Enter Judgment" with the county's Prothonotary, where the verdict was rendered. Only then can the judgment-creditor begin to collect on his judgment.

Attaching Liens to a Judgment Collection

Next, the judgment-creditor must ascertain where the judgment-debtor keeps his property. A judgment acts as a lien against property owned by the judgment-debtor. That lien only applies, however, to where the judgment is filed.

If the trial judge enters a $5000.00 judgment in Montgomery County, but the judgment-debtor owns a house in Bucks County and has no other property, then the judgment-creditor may never obtain the $5000.00 owed to him. In this example, the judgment-creditor must transfer the judgment from Montgomery County, where it was initially entered, to Bucks County, where the judgment-debtor's property lies.

When the judgment-debtor attempts to sell his house in Bucks County, a title search will alert prospective buyers to the $5000.00 judgment, and the judgment will remain attached to the house until paid or satisfied. The judgment-creditor may transfer the judgment to any county, though it makes the most sense to transfer the judgment to a county where the judgment-debtor possesses property.

The judgment-creditor may continue to apply liens against the property until the amount of the judgment is satisfied. A judgment-creditor looking to transfer judgments to other counties should know that each county has its filing requirements and fees. If an overzealous creditor is not prudent, he may accrue filing fees that total the same amount of the judgment!

Filing a Writ of Execution

Once the judgment-creditor has determined where the judgment-debtor keeps his property, he can enlist the respective county's Sheriff to assist in seizing the judgment-debtor's assets, including bank accounts and other personal articles. The county Sheriff has the authority to seize bank accounts and hold sales over confiscated real estate.

Utilizing the Sheriff's Office requires filing a Writ of Execution with the county Prothonotary, who then signs the Writ of Execution. The signed Writ of Execution, along with a fee, is then sent to the Sheriff.

The judgment-creditor must describe in detail within the Writ of Execution the property to seize, such as money, personal property, or real estate.

To better determine the amount, location, and other information regarding the judgment-debtor's money, the Pennsylvania Rules of Civil Procedure permit the judgment-creditor to engage in "discovery in aid of execution." [2] The judgment-creditor can take the deposition of any person, including the judgment-debtor or any representative of the bank (or other financial institution which holds the judgment-debtor's funds), known as the garnishee. Discovery in aid of execution can be taken anytime after judgment, including before the Prothonotary approves the Writ of Execution.

Interrogatories to the Garnishee

The judgment-creditor may also consider issuing written discovery to the garnishee, known as "Interrogatories to the Garnishee," to obtain more information regarding the judgment-debtor's monetary assets.[3] The judgment-creditor can serve the Interrogatories to the garnishee whenever the Writ of Execution issues.[4] The garnishee then has twenty days under Pennsylvania law to provide the judgment-creditor with written answers.[5]

Note that though the judgment-creditor can use these legal tools to garnish a bank account, the garnishing of wages is generally not available in Pennsylvania. Only in some very narrow exceptions can a judgment-creditor garnish a judgment-debtor's wages. The judgment-creditor should be aware of this when planning on how to collect his judgments.

If the judgment-debtor is cash-poor, the judgment-creditor can instruct the Sheriff (by way of a properly authored Writ of Execution) to levy against the judgment-debtor's personal effects or real estate. The Sheriff can take an inventory of the personal property available and schedule a sale of the assets, which is open to the public, a few weeks thereafter.

If the judgment is substantial, such as tens of thousands of dollars, then attaching a judgment lien against the judgment-debtor's house may be an option. However, the costs associated with securing a judgment to real estate can cost the judgment-creditor hundreds, if not thousands of dollars.

Further, the Sheriff typically only holds real estate sales at regular intervals, even as infrequently as every other month. It could take a judgment-creditor just as long to collect on his judgment as it did to get the judgment in the first place.

In any scenario, the circumstances surrounding a judgment and how to collect on it are never the same for any two judgment-creditors. A judgment-creditor looking to collect should contact a litigation lawyer to discuss the nuances of his case, what types of relief are available, and how to obtain that relief.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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