So you got sued by someone and they won. What can they do to turn their judgment into money? There are several ways a creditor can collect on a judgment they have won against you in a court decision. Here are two examples:
1. Wage Garnishments- Your employer may withhold some of your wages if there is a judgment entered against you. This is called a wage garnishment or a wage attachment. Wage garnishments are usually obtained by the judgment creditor receiving approval from the court, usually referred to as a writ. There are limits on how much of your wages can be withheld, depending on the state in which you reside. Normally, only 25 percent of your take home pay may be garnished, or your net weekly earnings that exceed 30 times the federal minimum wage (which is currently $7.25 an hour). However, there are exceptions to this rule depending on the type of debt being collected.
Ø Child Support – In Ohio for example, up to 50 percent of your wages may be withheld if you are supporting a spouse or another child not subject to the order. If you are not supporting a spouse or another child that is not subject to the order as much as 60 percent may be withheld.
Ø Income Taxes – It is important to note, that the IRS may withhold wages even without a judgment. This is a called an administrative judgment. The amount that can be withheld depends on your standard income tax reduction and the amount of dependents you may claim.
2. Property Liens – In some states such as Ohio, a lien is automatically created on the property in the county where the judgment is entered against you. In other states, the judgment creditor will have to record the judgment with the county and then a lien will be created against your property. If a property lien cannot be obtained, the judgment creditor may try to get a lien on your personal property, such as a car or boat or motorcycle, by filing the judgment with the Secretary of State. You will not be able to sell your property until the lien is removed because the property has to have clear title. In addition, the judgment creditor may be able execute this lien on your real or personal property and have your property sold through a public auction. However, if your property is exempt, the lien cannot be executed.
If you have lost a law suit and are facing some type of wage garnishment, bank account attachment, property lien, or other kind of collection action, consult attorney to find out your rights.