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Collecting on a Judgment.

August 2015

Often individuals and businesses take the necessary steps to obtain a judgment against a debtor. After obtaining the judgment, the creditor finds itself wondering how it will receive payment on the judgment. The Wisconsin Statutes provide a variety of avenues to pursue the collection of a judgment.

The first and most important step in the collection process after obtaining a judgment is to pay the docketing fee to the Clerk of Courts’ office. By docketing the judgment, the judgment becomes a 10 year lien against any real estate owned by the defendant in the county in which the judgment is rendered. Currently, the docketing fee is $5 per defendant. It also is possible to have the judgment docketed in other counties in which the defendant owns real estate, which requires additional documentation and fees.

The most common forms of collection are earning and bank garnishments. Earning garnishments for private employees, which deduct payments directly from a debtor’s paycheck, last a period of 13 weeks after they are issued. At the expiration of the 13 weeks, a new earning garnishment must be filed. If more than one earning garnishment is in effect against the employee, the employer must provide payment to the first earning garnishment filed for a period of 13 weeks. At the conclusion of the first earning garnishment, the second earning garnishment begins for a period of 13 weeks. During the earning garnishment, a creditor is entitled to 20% of the employee’s disposable income after taxes and social security. A debtor may file an objection with the court to stop the earning garnishment under limited grounds, which include but are not limited to
a bankruptcy filing, the debtor is below the poverty guidelines, or the debtor is receiving state assistance such as food stamps. Unlike the 13 weeks in an earning garnishment, a bank garnishment is a one-time garnishment per filing. After the bank garnishment is filed and served upon the bank, the bank will freeze the bank accounts of the debtor up to the amount listed on the bank garnishment forms. The Court may then issue an order releasing the funds to the creditor or may conduct a hearing if there is an objection from the debtor. The current exemption on an individual’s bank account is $5,000.00. There is no statutory exemption available for business accounts.

Lastly, aside from earning and bank garnishments, there are other statutory methods for the collection of a debt. It is permissible to pursue the seizure of personal property, such as tools, furnishings, etc., as well as for the seizure of real estate. There also are means for the collection of a business’ accounts receivable, till garnishments for restaurants and bars and the appointment of a receiver, in given circumstances. While these are possible means for the collection of a debt, it is recommended to consult with counsel as there are multiple factors that need to be considered to be successful.

While not all judgments can be immediately collected due to the financial circumstances of the debtor, it is important to keep in mind that a judgment remains collectable until 20 years after the judgment was issued, subject to bankruptcy law. It also is important to keep in mind that some debtors may be agreeable to voluntary payment terms, such as a wage assignment or a payment plan, if reasonably approached.

Attorney Christina Peterson

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As always, seek the advice of a qualified legal professional regarding any legal issues you may have. You should not disregard professional advice or refrain from seeking professional advice because of anything contained in this article. The information contained herein is general and educational in nature. Because each case is different and each legal analysis is customized for individual clients, the information contained in this article should never be used to determine your legal rights.

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