Asset seizure is one of the tools judgment creditors have for enforcing money judgments. It involves petitioning the court for a writ of execution that authorizes seizing the named property and selling it at auction. Proceeds realized from the sale go toward paying the judgment.
As you might imagine, asset seizure is a pretty effective tool. But there are certain rules that come with it. Judgment creditors don’t have unchecked power to seize and sell whatever they choose. According to Salt Lake City, Utah’s Judgment Collectors, they must go by the book.
If you are pursuing a civil lawsuit and anticipating a decision in your favor, here are three important things Judgment Collectors say you should know about asset seizure:
1. You Will Probably Have to Wait a Little Bit
First and foremost, you will have to wait a little bit before you can begin collection proceedings. Most states allow a certain amount of time for judgment debtors to either appeal the court’s decision or have their judgments vacated. On average, it is 30 days.
Also note that your attorney might advise you to pursue less aggressive collection strategies before moving to asset seizure. Seizing a debtor’s assets is the most aggressive form of judgment collection available. But there are other ways to go about it, including offering a payment plan.
2. You Won’t Actually Do the Seizing
Should you and your attorney determined that asset seizure is the best course of action, you will not be the one actually seizing the debtor’s property. Neither you nor your attorney have the authority to do so. Instead, that authority is granted to the local sheriff.
Let us say you were to seek a writ of execution against the debtor’s RV and boat. The writ would be delivered to the sheriff’s office. It would then be up to the sheriff to send deputies to retrieve the property.
Likewise, you also would not handle the sale yourself. Instead, the sheriff’s office would sell the property through a scheduled public auction. Notices of public auction are required, so you’re probably looking at a minimum of 30 days from the time the property is seized before it is ultimately sold.
3. Some Types of Property Are Off Limits
The third thing to know is arguably the most important: some types of debtor property are off limits to collection. The most common type of property is a primary residence. A primary residence is the home the debtor lives in along with the land it sits on. Primary residences are typically protected in one of three ways:
- Full Protection – Both house and property are fully exempt from collection efforts. Creditors can’t touch either of them.
- Partial Protection – The house is fully exempt while a portion of land beyond what is necessary to accommodate the structure is still available for seizure.
- Homestead Exemption – Rather than protecting the home and land, a homestead exemption protects a certain value thereof. Any equity above and beyond that value is subject to collection.
Under the homestead exemption model, you might have a value of $100K. If a primary residence and the land on which it sits are worth $150K, that extra $50K inequity is available to creditors. The property could still be seized and sold. Any revenues beyond the homestead exemption limit would be forwarded to the creditor.
Seizing and selling debtor assets is often a last-resort option for creditors. But it can be the first and only course of action a creditor takes. The big advantage is that asset seizure produces tangible results in a short amount of time.
