Judgment Creditor

• Author: Jeffrey Lehman, Shirelle Phelps

Page 46

A party to which a debt is owed that has proved the debt in a legal proceeding and that is entitled to use judicial process to collect the debt; the owner of an unsatisfied court decision.

A party that wins a monetary award in a lawsuit is known as a judgment creditor until the award is paid, or satisfied. The losing party, which must pay the award, is known as a JUDGMENT DEBTOR. A judgment creditor is legally entitled to enforce the debt with the assistance of the court.

State laws provide remedies to a judgment creditor in collecting the amount of the judgment. These measures bring the debtor's property into the custody of the court in order to satisfy the debtor's obligation: they involve the seizure of property and money. The process of enforcing the judgment debt in this way is called execution. The process commences with a hearing called a supplementary proceeding. The judgment debtor is summoned to appear before the court for a hearing to determine the nature and value of the debtor's property. If the property is subject to execution, the court orders the debtor to relinquish it.

Because debtors sometimes fail to surrender property to the court, other means of satisfying the debt may be necessary. In these cases the law refers to an unsatisfied execution?an outstanding and unfulfilled order by the court for property to be given up. Usually this will lead the judgment creditor to seek a writ of attachment, the legal means by which property is seized. To secure a writ of attachment, the judgment creditor must first place a judgment lien on the property. Also called an encumbrance, a lien is a legal claim on the debtor's property that gives the creditor a qualified right to it. Creditors holding liens are called secured creditors. The writ of attachment sets in motion the process of a levy, by which a sheriff or other state official actually seizes the property and takes it into the physical possession of the court. The property can then be sold to satisfy the debt.

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