The execution of judgments requires a combination of strategy, creativity, diligence and patience. With a valid judgment in hand, what do you do next? In state courts, debt collection actions may arise from commercial, commercial or consumer transactions or, more commonly, from the collection of monetary judgments obtained as a result of court proceedings or judgments in absentia. The attorney must understand the laws regarding fair collection practices and be prepared to comply with them, including key federal and state fair collection laws. The attorney must also understand the specific investigative tools available in the state where the collection and enforcement is carried out, as well as any exceptional laws. Given that the collection and enforcement of judgments can be just as complex and difficult as, if not more so, the procedure that led to the trial judgment, it is not surprising that actual judgment is rightly described as an art that requires a certain degree of mastery on the part of practitioners. In federal courts, a monetary judgment, whether rendered in the same county or registered in another county under 28 U.S.C. § 1963, is executed by a warrant of execution pursuant to Rule 69 of the Federal Rules of Civil Procedure, unless the court orders otherwise. However, rule 69 (a) (1) provides that enforcement proceedings – and in proceedings supplementing and supporting the decision or enforcement – must coincide with the proceedings of the State in which the federal court has its seat, although a federal law is applicable to the extent that that law applies. With respect to disclosure in particular, Rule 69(a)(2) provides that a judgement creditor may obtain disclosure from any person, including the debtor, in accordance with the Federal Code of Civil Procedure or the procedure of the State in which the court has its seat.
Therefore, a judgement creditor must consider all federal laws that may apply, the full range of enforcement procedures and options otherwise available in the venue, and the investigative mechanisms provided by federal regulations. In many cases involving a defaulting debtor, enforcement efforts may result in a request for a declaration of contempt and sanctions against the judgment debtor for non-compliance with court disclosure orders in support of enforcement. In such cases, counsel may also need to understand the requirements of 28 U.S.C. § 636, as they relate to proceedings before United States magistrates and the special procedures contained therein with respect to contempt proceedings. Once a judgment has been obtained in a court proceeding, the next step is to enforce the judgment. The most effective enforcement instruments after the judgment are the combination of judgment, garnishment, bank tax and garnishment of rents. These are the questions in which the law governing the enforcement of judgments has developed. While some responsible parties pay their debts immediately, others are less inclined to hand over their assets to the other party. Some parties need more incentives to meet their obligations. In some cases, the winning party may ask the court to intervene and take other steps to ensure that the prevailing party receives the money owed to them. This sub-chapter deals with the technique that a party may use to enforce a judgment.
State and federal state courts are busy, to say the least. For constitutional reasons, the courts must often give priority to the administration of criminal cases and court proceedings. In addition, the practical impact of budget and resource constraints, as well as the COVID-19 pandemic, are daily considerations when prioritizing the work of the courts. The net effect may be that enforcement judgments and disputes may not move at the pace that a judgement creditor would prefer. When preparing this analysis, counsel must also consider a number of practical factors, including the size of the judgment, the client`s willingness and ability to invest more resources in the collection process, and the client`s time horizon for restoring judgment. By carefully considering these aspects of a court enforcement order, the lawyer and client can formulate a clear, consensual and preliminary recovery plan, practical depending on the circumstances and available information. (2) Obtaining the discovery. In support of a decision or enforcement, the creditor or successor in title whose interest appears to be registered may obtain communication from any person, including the debtor, in accordance with these Rules of Procedure or the procedure of the State in which the court has its seat. §21(h) [see 4060] (Foreign Service Pension and Disability Plan; Regulation; rules and regulations; Pensions; non-transferable; Exemption from court proceedings) The amendment ensures that all investigative procedures set out in the rules are available to support the enforcement of a judgment, not just disclosure by filing. As currently drafted, one court has ruled that Rule 34 of disclosure is not available to the judgement creditor. M.
Lowenstein & Sons, Inc. v. American Underwear Mfg. Co., 11 F.R.D. 172 (E.D.Pa. 1951). Notwithstanding the wording and with strong reference to legislative history with reference to Rule 33, the Fifth Judicial District has held that a judgement creditor may avail itself of hearings under Rule 33. United States v. McWhirter, 376 F.2d 102 (5th Cir. 1967). However, the Court`s reasoning does not extend to discovery, except in the cases provided for in Articles 26 to 33.
One commentator suggested that existing language could be adequately extended to all discoveries, 7 Moore`s Federal Practice 69.05[1] (2nd edition 1966), but another believed that a rule change was necessary. 3 Barron & Holtzoff, Federal Practice and Procedure 1484 (ed. Wright 1958). Both the commentators and the court in McWhirter are aware that section 69 should allow the use of all detection devices under the regulations for political reasons. Note to subparagraph (a). This essentially follows Title 28 of the United States Code, [formerly] §§ 727 (State Law Executions) and 729 [now Title 42, § 1988] (Civil Rights Defense Proceedings), except that, as in the similar case of attachments (see note to Rule 64), the rule establishes the applicable law of the state as the law of the time. in respect of which the appeal is brought. and thus renders the rules of the local district court superfluous and replaces them.
But what if a creditor doesn`t know what assets the debtor has? Without knowing which assets the enforcement must correspond to, the judicial creditor may have difficulties in enforcement. For this very reason, courts have developed general disclosure rules so that a judgement creditor can audit the debtor`s finances to determine the debtor`s assets. Given the time and costs often required to enforce judgements, effective asset recovery requires a targeted approach. There are often significant opportunities to obtain information about the debtor`s assets from third parties in domestic court proceedings, even if the debtor resides abroad. The prompt and specific collection of information about the debtor`s assets before initiating enforcement action is essential to combat the myriad of frauds typically used by debtors. To avoid a dissatisfied client, any discussion of judgment collection must include an honest and realistic assessment by counsel of the various challenges associated with the process and the recognition that a judgment does not guarantee that it will be collected, even with careful enforcement efforts. Any honest assessment of the collectability of a judgment should include: As a first step, creditors should try to identify the assets of the judgement debtor that are located in the jurisdiction where the judgment was registered. Such property may be seized directly using the available enforcement mechanisms of the judicial jurisdiction. If the assets cannot be readily located in the judicial jurisdiction, creditors may pursue national enforcement in state courts under the Uniform Foreign Judgments Enforcement Act (“UEFJA”), as assumed, or in federal courts under Rule 69 of the Federal Rules of Civil Procedure and 28 U.S.C.