Joseph G. Ballstaedt
801.365.1021
joe@snjlegal.com
If you win a lawsuit in Utah, you receive a judgment from the court, a piece of paper explaining that you won. This judgment usually includes an amount of money that you are now authorized to collect against a person or business. But this piece of paper is just a piece of paper; it does not self-enforce. If the debtor is honest and has money, he or she will probably pay the judgment amount as soon as possible to avoid interest and other potential costs associated with collection, for which the debtor may likely be responsible. Also, judgments show up on credit reports and can keep a person or business from obtaining loans, among other problems.
Without voluntary payment from the debtor, a creditor (the owner of the judgment) will have to engage in collection efforts to actually obtain the judgment amount. These collection efforts are often time-sensitive. A debtor’s money and assets can disappear quickly, especially once the debtor knows there is a judgment issued by the court. (Even if the debtor didn’t fight and a judgment entered by default, the creditor is required under Utah rules to send the debtor a notice of the judgment.) If the debtor’s assets disappear and cannot be located, the judgment is probably worth nothing. If a debtor hides or sells assets, the creditor may be able to unwind these transactions, secure the assets, and satisfy the amounts owed. Of course, however, a creditor is in a much better position if it can seize the assets before they disappear. So, in other words, time is often of the essence.
Most collection efforts must be authorized by the court through a type of court order called a writ. In Utah, courts can issue writs that include the following:
- Writs allowing a creditor to secure and sell the debtor’s personal property (such as cars, equipment, paintings, etc.).
- Writs of garnishment sent to a debtor’s employer, requiring the employer to pay the creditor a portion of the debtor’s wages.
- Writs of garnishment sent to a debtor’s bank, requiring the bank to deliver to the creditor all funds held there.
- Writs of garnishment on other parties who owe the debtor money, instructing these parties to deliver the money to the creditor instead. For example, if a business enters a contract with the debtor and owes the debtor $30,000 for certain services the debtor provided, the creditor can—through a writ from the court—force the business to pay the creditor the amounts it owes the debtor.
Courts do not immediately issue writs along with a judgment. A creditor must request them, and the Utah Rules of Civil Procedure generally require that 28 days pass before the court issues a writ. Although there are other ways to stay enforcement of a judgment (or have it put on hold), this twenty-eight-day stay applies to all judgments and is automatic. It provides the debtor a little time to protest the judgment before losing its assets. For example, if the debtor appeals the judgment, it can—under certain circumstances—put enforcement of the judgment on hold until the appeal is resolved.
In the Utah Rules of Civil Procedure, the stated exception to the general 28-day stay is that the court can issue a writ earlier if, pursuant to the court’s discretion, it so orders. Stated simply, the court can do whatever it feels is just and appropriate. But the court won’t do anything unless the creditor asks for the stay to be lifted. For instance, perhaps the debtor has delivered some items to an auctioneer to be sold to the highest bidder a week after the judgment was entered. In this scenario, waiting the twenty-eight days would prevent the creditor from intercepting these funds and harm the creditor’s ability to collect on the judgment, so—upon request—the court may lift the stay. Or perhaps the creditor has evidence that the debtor is about to withdraw funds from its bank account and put them in a hidden or inaccessible account—or maybe the debtor is about to get paid on a big contract with a third party. The court may think it is proper, before the twenty-eight-day stay ends, to have a writ issued on the bank and prevent these funds from disappearing or to have a writ issued on the third party so that this third party will pay the creditor instead of paying the debtor.
If you are a debtor or creditor with questions about judgments and collection efforts in Utah, I am happy to help. I offer a free consultation. Call me. My direct dial is 801.365.1021, or you can e-mail me at joe@snjlegal.com.
