A judgment debt is owed by a person against whom a monetary judgment has been entered. This individual will be a judgment creditor. The judgment creditor is the person to whom the judgment debtor owes money. The judgment debt can be collected by the judgment creditor. The judgment creditor can enforce the judgment if the judgment debtor fails to pay the bill.
After the judgment is finalized, there is usually no waiting time, which means the judgment creditor can begin collecting the judgment debt immediately. To collect the judgment debt, the creditor can contact the debtor. The creditor may accept an installment payment plan from the debtor if the debtor cannot afford to pay the whole amount of the judgment. The creditor may even accept a lesser amount as full payment than the judgment debt.
If the judgment debtor does not pay the judgment, the judgment creditor may call a court enforcement officer to have the judgment enforced. This officer is usually a county sheriff. The sheriff can remove money or property from the judgment debtor to settle the obligation after obtaining a court order. The sheriff, for example, can garnish the debtor’s bank account, vehicle, or even wages.
The procedure for collecting on a judgment debt varies by state. For California’s collection procedure, see this paper, and for New York’s collection procedure, see this page.
What does it mean when you have a Judgement against you?
A judgment is the official outcome of a court case. In debt collection lawsuits, the judge may rule in favor of the creditor or debt collector. If you do any of the following, you are likely to have a judgment filed against you for the amount claimed in the lawsuit:
Additional fees, such as collection costs, interest, and possibly attorney fees, may be assessed against you by the judge.
Important: Judgments offer debt collectors significantly more powerful methods for collecting your debt. Wage or bank account garnishments, as well as a lien on your house, are examples of these methods.
If you are being sued or if someone has won a judgment against you, see an attorney. Before a court issues a judgment, you may be able to work out a compromise or settlement with the creditor or debt collector. A lawyer for a debt collection litigation can be found in a variety of ways.
What is the meaning of Judgement debt?
Any sum of money that a court of law requires the losing party to pay to the winning party is known as a judgment debt. An individual, a family, a company/institution, or the government may be the parties in the case.
However, the focus of this article is on the Ghanaian government’s settlement of these obligations to people, families, and businesses.
Hon. Ken Ofori-Atta, Ghana’s Finance Minister, announced on Friday, July 12, 2019, that the current NPP government had paid approximately GHS 280 million in judgment debts since taking office in January 2017. He went on to say that the current government inherited a GHS 482 million judgment debt from her predecessor, the National Democratic Congress (NDC), and that a number of cases ongoing in court had generated an additional GHS 197 million.
With such large quantities of money paid as judgment debts capable of fixing some of the country’s many developmental problems, it’s become necessary to figure out how and why it happens.
The payment of judgment debts became a hot topic in the country in 2012, since certain beneficiaries were regarded unworthy of the funds. As a result, then-President John Mahama appointed Justice Yaw Appau (JCA) as a single commissioner to investigate the reasons and payments of these judgment debts. His conclusions were published in a government white paper titled THE REPORT OF THE COMMISSION OF INQUIRY INTO PAYMENTS FROM PUBLIC FUNDS ARISING FROM JUDGMENT DEBTS & AKIN MATTERS (C.I. 79/2012), which was handed to President Mahama on May 20, 2015.
Contractual violations by the government and its agencies were one of the key causes uncovered in the research. This is mostly due to a lack of trust between most current political leaders and their predecessors.
Most new governments believe that fraudulent and corrupt actions were carried out before a contract was agreed upon by the previous administration, resulting in the cancellation of those contracts, despite the fact that such charges have yet to be substantiated. Disgruntled companies that have had their contracts terminated eventually go to court, and if the court finds the government’s charges to be baseless, the company is given a judgment debt.
Governments’ acts, both current and historical, have cost the country a lot of money, and their refusal to liquidate these debts has resulted in a rise in claims due to compounding interest and penalties. The Construction Pioneers (CP) v. Attorney-General (A-G) case is a prime example, in which several contracts given to CP during President Rawlings’ administration became the subject of a protracted legal battle. CP won an arbitration hearing at the International Chamber of Commerce (ICC) in London.
According to the Commissioner’s report, the ICC’s 27 million award to CP in October 2002 had ballooned to 163 million by February 2009, with interest of 12,800 every day.
The refusal to settle the bills was attributed to the Kuffour administration’s suspicions of “either fraud or corruption or both,” though this could not be demonstrated with “facts and figures” in their appeals to the ICC. The CP debt is “the most expensive debt ever incurred as a result of purported seeming breach of contract based on a few contractural words,” according to the Commissioner. It’s worth noting that, despite the total debt being 163 million, the government was able to negotiate it down to 94 million, which was paid to the company.
Calf Cocoa International (Ghana) Ltd. v. Attorney-General, Societe Generale (SG) v. Ghana National Petroleum Commission (GNPC), and African Automobile Ltd. v. Ministry of Employment, Manpower and Development are some of the other cases that resulted in the government paying judgment debts as a result of contractual breaches.
Compensation payments made as a result of the state’s forcible land purchase have resulted in large sums of money being paid as judgment debts. Peter Abbam v. Attorney-General, for example, is a case in which the complainant’s (Peter Abbam) fence wall was demolished during the construction of the Kanda Highway. He took legal action in the High Court in 2002, and in 2003, he obtained a total judgment debt of GHS 264,623.00.
In the case of Dansoman Acquisition – Nii Kojo Danso v. Lands Commission, the plaintiff was able to obtain a default judgment against the Attorney-General and the Lands Commission for a total of GHS 57,433,900.00 in relation to the Dansoman Housing Estate Land Acquisition under E.I. 27 of 1968. It should be highlighted that the defendants (state agencies) in both cases failed to attend to defend the action, resulting in a default judgment.
In addition, another source of judgment debt identified by Justice Appau is claimed tortious/statutory violations committed by public officials while performing their official duties. In L/Cpl Baba Bukari v. Attorney-General, for example, the plaintiff (L/Cpl Bukari) sued the Attorney-General for wrongful dismissal by the Police in 2010, after he was fired from the Police Service for misconduct during a Service Enquiry in 2006. The action was not defended in court, as in other judgment debt instances, and L/Cpl Bukari was awarded a default judgment of GHS 12,000.
In M/s EP Ghana Ltd. v. Ministry of Youth and Sports, M/s EP Ghana obtained a negotiated settlement of GHS 177,664.09 in 2009 after serving a notice of intention to sue to the A-G after the Ministry of Youth and Sports failed to make a final payment of GHS 5,053.21 in 2001. This arose from the plaintiff’s failure to receive payment for all bills owed to him after the Ministry of Youth and Sports (MoYS) rehabilitated some tennis courts at the Accra Sports Stadium for GHS 72, 705.79 in 2000, paying GHS 67, 652.58 of the total amount in 2001, leaving a balance of GHS 5,053.21.
Last but not least, certain State officials and claimants have viewed the award of judgment debt as an opportunity to “make, pillage, and share.” “Either by inadvertence or pure mischief through connivance, both the Chief State Attorney, Samuel Nerquaye Tetteh, who was charged with the defence of the suit in the trial court, and the trial judge did not scrutinize the processes filed before them with judicious eyes,” the Commissioner wrote in Alfred Agbesi Woyome v. Attorney-General and Others. According to the allegation, the Economic and Organized Crime Office (EOCO) later discovered that the plaintiff (Woyome) had credited the wife of the Chief State Attorney, Mrs. Nerquaye Tetteh’s bank account with GHS 400,000.00 after the case was successful.
To sum up, the Commissioner’s report shows that poor record keeping; the government’s decision in 2009 to liquidate most of the judgement debts hanging around the State’s neck as a result of previous governments’ failure to save the economy from collapse; the Attorney-failure General’s Department’s to properly defend the State; and the ill-intent of corrupt State officials, civil servants, Ghanaians, and expatriates to milk the State
How long does a judgment debt last?
In NSW, judgment debts can be enforced for a period of 12 years from the date of the judgment. Before attempting to collect on a judgment debt, you should seek legal guidance.
What happens when you get a Judgement?
If your creditor succeeds in their claim or you fail to appear in court, the court will enter a judgment against you. A notice of the judgment entry should arrive in the mail. The judgment creditor can then try to collect money from you using the court judgment. Wage garnishment, property attachments, and property liens are all common tactics.
The amount of money and categories of property that a judgment creditor can collect from you are determined by state legislation. These laws differ. As a result, the rules that apply must be found in your own state. A consumer law attorney can assist you in understanding the laws governing judgment collections in your jurisdiction.
Can you go to jail for not paying a Judgement?
When a defendant fails to pay a judgment, unfortunately, only negative things happen. A judgment does not just urge you to agree till you do. It basically allows the creditor to take the money from you even if you don’t want to give it to them.
Your Property and Wages Might Be Seized Over Debt
This is how things could go: The creditor might ask the court for an execution if the judgment is valid. This authorizes a law enforcement officer (such as a Sheriff or City Marshal) to seize and sell your property. They could, for example, tow your collector car to an auction. It may appear intrusive, but it is lawful.
A creditor may be able to place a lien on your property as a result of a judgment. That means they’re the ones who own it. Assume you’ve been trying to sell your home. Either you won’t be able to sell it until you pay it off, or the proceeds from the sale will be used to pay off the debt.
Garnishment is another popular method of collecting a debt. Your employer may be ordered by the court to deduct money from your salary. They can also take money from your bank account. The amount will vary based on where you reside, and there is a cap to ensure that you have enough to live on. In most circumstances, VA and Social Security payments are not available.
You Could Serve Jail Time Over Your Debt
Looking at what happens if a defendant does not pay a judgment from a different perspective, here’s one particularly sneaky way they’ll get money out of you: putting you in jail.
If the creditor can’t legally access your money or property, they may conduct a debtor’s examination, in which they can examine you. If you fail to appear, the court has the authority to “found you in civil contempt.” Your absence is interpreted by the court as disobedience of orders, and you must pay up or face jail time.
If you select prison, you’ll be locked up until you pay your bond, which will very certainly equal the amount you owe. Sneaky.
As a result, don’t forget to attend a debtor’s examination! Even if the creditor has done this before, and you know they can’t win, they’re hoping you’ll forget about it one day.
Your Debt Might Increase with Interest and Fees
Remember that a judgment will accrue interest for as long as it’s active, regardless of whether you’re willing to pay or trying to keep creditors at bay.
The average lifespan of a judgment is five to seven years, although it could last 20 or more years depending on your position and area. That’s a colossal amount of interest, not to mention a significant mental burden.
Your Judgment Will Show Up On Your Public Record
Remember that decisions become part of your public record. They’re one of the types of court actions that must appear on your credit report, along with bankruptcy and tax liens. Your credit score will suffer as a result, and lenders will be less willing to lend you money.
Background checks can reveal judgments as well. Your future employer will have to know if you apply for a position that pays more than $75,000 per year.
In certain circumstances, all you have to do is wait for the judgment to be discharged from your credit report. But keep in mind that if a judgment hasn’t been met, a creditor can have it reinstated.
So you’re curious about what happens when a defendant fails to pay a judgment. Time can be your ally in some ways, but only if your creditor is forgetful.
Keep employers from learning about your debt by filing a response with SoloSuit.
Can you go to jail for a Judgement?
Is it possible to go to jail for debt? Debt collectors collecting debts for others are prohibited from engaging in abusive or harassing behavior, which includes threats of sending you to jail, under the federal Fair Debt Collection Practices Act. If you do not pay your bills, your creditors may file a lawsuit against you in court.
In Ohio, you have 28 days to reply to a court lawsuit filed by creditors against you. You should react by submitting an answer even if you disagree with the amount of money claimed or do not believe you owe the money. If you fail to respond to a legal summons and complaint, or if you fail to appear in court when required, the creditor may win the case by default and obtain a judgment against you.
The court can then take legal action against you. Courts have the authority to order wage garnishment or bank account attachment, as well as to empower creditors to confiscate some of your personal goods and place a lien on your real estate. You may be forced to sell your home if the judgment is substantial enough and you have equity in it. While Ohio law provides an exemption for a specific amount of your home’s value, anything above that amount might be used to satisfy creditors. There is also a medical debt exemption, as well as personal property and vehicle limits. A list of exemptions can be found in Ohio Revised Code 2329.66.
If your creditors are still unable to obtain payment, the courts may require you to appear in court for a debtor’s examination.
Then you must answer questions about your money and why you haven’t paid that debt while under oath.
If you fail to appear for the debtor’s examination, the court may hold you in civil contempt for failing to comply with the court’s order. If you do not pay or follow the court’s demands, you may be sentenced to prison.
So, will you end up in prison because of your debt? No, not at all. It’s not that people owe money that puts them in jail; it’s that they neglected or failed to follow a court order or show up for a hearing. The court can issue an arrest warrant if you are determined to be in contempt of court. If you are arrested, you may be held in jail until you post a bail equivalent to the judgment amount. In addition, you may be charged a booking fee, a daily fee, or both for each day you are in jail in 40 of Ohio’s 75 counties.
Judgment Debtor Summons
A Judgment Debtor Summons is a summons issued by the court to require the Judgment Debtor to appear in court and disclose information about his assets and how they can be sold to pay the judgment debt. Order 48 of the Rules of Court 2012 is the regulation that governs the rules of Judgment Debtor Summons.
The Judgment Debtor is forced to appear in court and be orally examined under oath before the Registrar of the Court after receiving the Judgment Debtor Summons. The Judgment Debtor will be requested to explain and submit information on the Judgment Debtor’s financial means of repaying the judgment debt, as well as any property discovered that could be used to settle the judgment debt. If the Judgment Debtor is a corporation, the company’s directors or officers will be expected to appear in court on the company’s behalf to provide information on the corporation’s revenue and assets, as well as to explain how they can be utilized and disposed of to meet the judgment debt.
If the Judgment Debtor fails to appear in court for a hearing despite being properly served with the Judgment Debtor Summons, the court has the authority to either: (1) order that the Judgment Debtor be arrested by issuing an order of arrest and having the Judgment Debtor brought to the court to be examined; or (2) make an ex-parte order (an order made in the absence of the Judgment Debtor).
The court may order the Judgment Debtor to pay the judgment debt in one lump sum or in instalments (“Court Order”) based on the Judgment Debtor’s examination (or non-appearance).
A judgment notice may be issued against the Judgment Debtor if the Judgment Debtor fails to comply with the Court Order despite having sufficient resources to satisfy the judgment debt. The Judgment Debtor will then be summoned to court to explain why he failed to comply with the Court Order. The Judgment Debtor will also be required to show cause why he should not be imprisoned for failure to comply with the Court Order by way of an order for committal.
Garnishee Proceedings
Garnishment proceedings under Order 49 of the Rules of Court 2012 are another way to enforce a judgment debt. Garnishee procedures are used to collect a judgment obligation owing to the Judgment Debtor from a third party.
Garnishee procedures are particularly valuable if you have information of a debt owed to the Judgment Debtor by a third party (also known as garnishee) or any cash in the Judgment Debtor’s bank accounts. You can start garnishee proceedings against a third party (including the Judgment Debtor’s bank) by getting a court order requiring the third party to pay you the amount of any debt owed to the Judgment Debtor from the third party. You can garnish or “intercept” the money before it reaches the Judgment Debtor using this method.
The court will hold a hearing for the third party or garnishee to determine whether the garnishee owes the Judgment Debtor any amount. The court will determine if the amount garnished is disputed, as well as any pertinent factors mentioned by the garnishee, during the hearing.
A copy of the garnishee order is served on the garnishee to recover the Judgment Debt once the court authorizes the garnishee order. Any previous injunctions in the case will be overridden by a garnishee order.
Writ of Seizure and Sale
The purpose of a Writ of Seizure and Sale is to recover debt through the sale of moveable or immovable property. If you know the Judgment Debtor owns valuable property that can be sold and the earnings utilized to satisfy the amount owed to the Judgment Debtor, a Writ of Seizure and Sale is an option to consider. Order 45 rule 12 of the Rules of Court 2012 contains the provision for a Writ of Seizure and Sale.
The court bailiff will confiscate the property listed in the order after a Writ of Seizure and Sale has been issued. Following the seizure of the Judgment Debtor’s property, the sheriff or bailiff will auction the confiscated properties to pay the Judgment Debtor’s judgment debt. Within 14 days of the property being seized, an auction of the seized property is normally held.
After deducting the necessary charges and expenditures, the proceeds of the auction or sales will be shared among the Judgment Creditors.
Winding-up Proceedings
The process of dissolving a corporation is referred to as winding-up proceedings. The assets of the firm will be sold as part of the winding up or liquidation process, and the money will be used to settle the company’s debts owing to creditors. The Companies Act 2016 and the Companies (Winding-Up) Rules 1972 control winding-up proceedings. A company may be susceptible to winding-up procedures in a variety of circumstances, the most common of which is when it is unable to fulfill its debts to its creditors. When a corporation is unable to pay its obligations in excess of RM10,000, winding-up proceedings can be initiated.
However, in light of the Covid-19 crisis and the implementation of the nationwide Movement Control Order (MCO), SSM announced on 10.4.2020 that the prescribed amount of RM10,000 will be increased to RM50,000 until 31.12.2020 to help companies in financial distress and to reduce the risk of companies being closed down during the pandemic.
A statutory Notice of Demand under section 466 of the Companies Act 2016 must be delivered to the debtor firm to demand the outstanding debt before initiating a winding-up process in court. If the Judgment Debtor does not react to the Notice of Demand within 21 days, the corporation is presumed to be insolvent and unable to pay its debts. In view of the Covid-19 problem and the MCO’s enforcement until December 31, 2020, SSM has extended the statutory 21-day term to six months. Following the expiration of the Notice of Demand, a creditor may file a winding-up petition against the debtor corporation to begin the winding-up process.
The court will appoint a liquidator to handle the assets of the wound up firm, examine the company’s affairs, sell the company’s assets, and finally distribute the money to settle the company’s debts if a winding-up order is issued by the court. The liquidator is normally appointed by the court and is the Director-General of Insolvency (DGI). However, under Section 477 of the Companies Act 2016, the court might appoint an approved liquidator other than the DGI to oversee the business of the wound-up firm.
Bankruptcy proceedings
Individual debtors who are unable to pay a judgment debt are subject to bankruptcy proceedings, which are controlled by the Insolvency Act 1967. The minimum amount required to start bankruptcy proceedings is RM50,000.
A bankruptcy notice ordering the Judgment Debtor to settle the judgment debt must be served on the Judgment Debtor before bankruptcy procedures may begin. The Judgment Debtor has committed an act of bankruptcy if he or she does not respond to the bankruptcy notice within seven days. After that, the Judgment Creditor has the option of filing for bankruptcy against the Judgment Debtor.
The assets of the Judgment Debtor will be allocated to the DGI whenever a bankruptcy order is issued against the Judgment Debtor. The DGI will subsequently be in charge of distributing the assets of the Judgment Debtor to the Judgment Creditors. This is accomplished by convening a creditors’ meeting to discuss the asset arrangement. For the purposes of the meeting, the Judgment Debtor must submit to the DGI a statement declaring his assets.
Once a Judgment Debtor is declared bankrupt, he is subject to a number of restrictions. The Judgment Debtor, for example, is not permitted to go abroad without the authorization of the DGI; he is not permitted to hold any assets; he is not permitted to spend more than RM1,000 on his credit card; and he is not permitted to apply for any loans.
Order of Committal
An order of committal is a court order that punishes a person (contemnor) for breaking the provisions of a court order by imprisoning, fining, or both. It can only be used in a decision that tells someone to do something or not do something within a certain amount of time. While most judgments for debt payment cannot be enforced through an order for committal, non-compliance with other judgments that require the performance of specific activities, such as the delivery of post-dated checks by a given deadline, may be considered contempt of court. Contempt of court is a serious offense, and there are a number of criteria that must be met in most cases, including the endorsement of a penal notice on the judgment and personal delivery of the judgment on the Judgment Debtor or the Judgment Debtor company’s directors. Order 52 of the Rules of Court 2012 outlines the court procedure for obtaining a committal order.
What is a Judgement holder?
A judgment is entered by the court after a judge or jury renders a verdict or after a court-approved settlement in a civil court case. A typical judgment includes an order for money to be paid from one person to another. However, the debtor (the one who owes the money) does not always pay. A judgment lien is one method of ensuring that the person who won the judgment (the creditor) receives the money owed to him or her. A judgment lien grants a creditor the right to receive a specific sum of money from the proceeds of the debtor’s property sale.
How decree is executed?
A decree can be carried out in a number of ways, including delivery of possession, arrest, and imprisonment of the judgment-debtor, attachment of property, sale, appointment of a receiver, partition, cross-decrees and cross-claims, payment of money, and so on.
What happens if I can’t pay a Judgement?
As soon as the decision against you becomes final, you should pay it. If you don’t pay, the creditor can begin collecting the judgment straight away if the following conditions are met:
- The decision has been made. You can check the court’s records at the clerk’s office to ensure that the judgment has been entered; and
- Because of an appeal, a bankruptcy stay, or other legal action, there is no stay (suspension or postponement) on the order’s enforcement.
If you do not pay on your own, the judgment creditor has several legal avenues to collect the judgment from you. If these tools are causing you undue hardship, you may have other options. For additional information about your options, click on the topic below.
What happens if you ignore a Judgement?
If you fail to respond to the lawsuit, the court will impose an automatic default judgment against you. 1 Of course, even if you respond to the lawsuit, you can still lose the case.
Do I have to pay a 10 year old debt?
In most circumstances, a debt’s statute of limitations will have expired after ten years. This implies that a debt collector can still try to collect it (and you still owe it), but they can’t usually take legal action against you. They are unlikely to contact you again if you inform them that the debt has passed the statute of limitations.
