Judgment collection is a fascinating enterprise with its own language and terms. For example, consider the satisfaction of judgment. Have you ever heard of it? Do you know what it is and why it matters to both judgment creditors and debtors? If not, you’re about to learn the basics.
A satisfaction of judgment is a good thing. Once a judgment creditor is ready to file it, the collection process is over. Both the judgment creditor and debtor can get on with their lives and put the whole matter behind them.
The Debt Is Paid in Full
Note that the details of the satisfaction of judgment differ from one state to the next. As a general rule, the satisfaction of judgment is a legal instrument that declares a money judgment has been paid in full. A satisfaction of judgment essentially brings the case to a close. The creditor will no longer be collecting while the debtor no longer has to pay.
It should be noted that ‘paid in full’ can mean a number of different things. It legally means that the creditor considers the debt satisfied. But it can be satisfied in one of two ways:
- Full Amount – The debtor pays the full amount of the judgment along with additional court costs, legal fees, penalties, and interest.
- A Lesser Amount – If the creditor agrees, the debt in question could be satisfied by a lesser amount. Perhaps the creditor agrees to 50% in order to get paid right away. Once that amount is paid, the debt is satisfied.
Generally, a satisfaction of judgment is filed with the same court that decided the original case. This is usually a county court. The creditor or his attorney completes a simple form and files it with the court along with any applicable filing fee.
If Liens Have Been Placed
Theoretically, filing a satisfaction of judgment negates any liens that have been placed on the debtor’s property as a result of collection efforts. But there are cases when a debtor or his attorney might ask the creditor to go one step further by recording the satisfaction of judgment with the county recorder.
When such a request is made, the idea is to give the debtor relief from those liens. It tends to be a formality in most cases. Nonetheless, filing with the county recorder can give the debtor some additional peace of mind.
Why It Matters
Satisfying a money judgment pretty much closes the case. And yet the satisfaction of judgment is still an important document. It matters because it’s the final step in legally closing matters out.
To the creditor, the satisfaction of judgment is a legal acknowledgment that the debt has been paid in full. Upon filing, the creditor is essentially relinquishing all rights to collect. This may not be important to the creditor and his attorney, but it is vitally important to the judgment debtor.
From the debtor’s perspective, a satisfaction of judgment is legal proof that the debt has been satisfied and fully cleared. The debtor no longer has to worry about risks to nonexempt assets, wage garnishment, etc.
Contact Us for Help
If all of this seems a bit confusing to you, know that you’re not alone. Judgment collection is not easy. There is a lot of legalese to know. There are rules to learn, procedures to implement, and deadlines to meet.
Collecting a money judgment may require more time and knowledge than you have. If that’s the case, contact Judgment Collectors. We might be able to help you collect more quickly and fully.