How Do I Collect on a Judgment: The Debt Collection Process in Virginia

Introduction
Congratulations on winning a judgment.  The judgment will likely appear on the defendant’s credit reports, which will make it more difficult for the defendant to borrow money from a financial institution.  However, your goal in obtaining a judgment was likely to collect from the defendant.  Getting the defendant (debtor) to pay you (creditor) is often more difficult than winning the judgment itself.

To collect on the judgment, you must complete the following three tasks:
1. Locate the debtor’s assets (as many as possible)
2. Attach the judgment to the assets by placing a lien on the assets (called a “judgment lien”)
3. Obtain the assets to satisfy the judgment (the process of liquidation or foreclosure).

Placing a Lien on Assets
When you buy a new car from a dealership or obtain a mortgage to buy a piece of real estate, you almost certainly provided a lien to the dealership and the bank.  The lien allows the dealership and the bank to retake the car or home if you do not maintain your financial obligations.  Similarly, you can put a judgment lien on the defendant’s assets, which attaches the judgment to the assets and allows you to sell the assets to satisfy the judgment.  The type of asset dictates the process for attaching the judgment lien.

You, the creditor, decide whether to use debtor’s real property, personal property (tangible property), and/or wages and financial accounts (intangible property) to collect on the judgment – the debtor cannot require you to use personal property before real property.

Regardless of the asset type that you are trying to obtain to collect on the judgment, proper notice must be given to demonstrate your intentions and to give the defendant an opportunity to pay the money owed.  This is accomplished by filing a “judgment lien” in the city or county where the asset is located.

Below is a summary of asset types and the corresponding process for a creditor to attach a judgment lien to the assets of a debtor.

Real Estate (Real Property)
The creditor must record the judgment lien in the public records office of the city or county where the property is located.  In Virginia, a judgment from a circuit court is automatically recorded in the public land records where the circuit court is located.  The recorded judgment lasts for a decade and can be renewed.  See Virginia Code § 8.01-446.  However, in general district court, the creditor must take the judgment to be recorded the land records.  Once the lien is filed, it applies to all real property owned or later acquired by the debtor in the city or county where filed, so often a creditor will record the judgment lien in multiple counties just in case the debtor obtains a property interest in another city or county.  See Virginia Code § 8.01-458.

The Uniform Enforcement of Foreign Judgments Act (UEFJA) allows the creditor to obtain a judgment in another state without having to litigate the entire case again.  The simplified process only requires: 1) proof of the judgment; 2) the last known address of the debtor; and 3) and any filing fees.  Most states, including Virginia, D.C., and Maryland, have adopted the UEFJA; however California, Massachusetts, and Vermont have not.  Obtaining a judgment in another state allows the creditor to attach a judgment lien to the debtor’s property in that state.

Often, the next step is simply waiting for the creditor to attempt to sell the asset or wait for another creditor to initiate foreclosure by filing a “Creditor’s Bill in Equity.”  Alternatively, the creditor can begin the foreclosure process, but it is fairly expensive because it requires a separate lawsuit involving all interested parties (debtor, mortgage holders, other judgment lien holders, and anyone else with an interest in the property).  A commissioner will hear the case to determine what profits (like rent) can be obtained from the property.  If the projected profits are insufficient to repay the judgment in five years, the property may be sold at a public auction.  As you can imagine, this can be a lengthy process and the commissioner is paid hourly (typically by the party initiating the foreclosure).  However, if the debtor has the ability to pay, but simply refuses, foreclosure may be beneficial if there is sufficient equity in the property.

A final note: there is no “right of redemption” in Virginia, so even if the debtor obtains sufficient funds to pay the debt after the sale, the debtor will not be able to reclaim the property.

Levy Personal Property
The creditor can seize and sell debtors personal property (like a motor vehicle, jewelry, appliances, equipment, furniture, clothing, etc.) to collect on the judgment.  The first step is to obtain a “Writ of Execution” or “Writ of Fiera Facias” (or “fi fa”) from the clerk of the court in the city or county where the personal property is located to attach the judgment lien to the property.

The writ allows for the Sheriff’s Office to “levy and seize” the property or “list and leave” the property.  If the creditor decides to have the Sheriff’s Office “levy and seize” the property, the creditor must post a surety bond to protect the debtor, Sheriff, and any other lien holder against a wrongful levy.  Virginia Code §8.01-551Virginia Code §8.01-553.  Then, the Sheriff can seize the property and place it into storage until the foreclosure sale where the profits are used to repay the creditor.  Virginia Code §8.01-550.

Generally, this is an expensive process and the details of the process can vary from jurisdiction to jurisdiction.  In some jurisdictions, the Sheriff will only be present, but will not participate in the actual “levy and seize” process.  This requires the creditor to hire a bondsman and pay the corresponding levy fee and storage fee until the Sheriff can sell the item at auction.  Then the creditor would likely have to pay a percentage of the proceeds from the auction to the Sheriff (generally around 10%).  The remaining proceeds would be paid to the creditor.  Unless the personal property has significant value, the costs associated with levying the property and the public auction sale cannot be justified.

Instead, a creditor may elect to have the Sheriff’s Office “list and leave” the property, which is significantly less expensive.  The Sheriff makes a list of the property, places an identification label on the property, and leaves the property where it was found.  Although the debtor may continue using the property with the identification label attached, hopefully, this process will be embarrassing enough that the debtor pays the creditor.

Whether the creditor chooses to levy or list the property, the court sets a return date for 90 days from the date the writ was filed, so the Sheriff’s Office has 90 days to complete the selected process.  The writ must include the total debt owed to the creditor on the return day, which includes all accrued interest up to the return date and provides the debtor with all allowable credits.  If the creditor is attempting to seize debtor’s personal property after the ninety-day period, a new writ must be filed (and should be granted provided the initial judgment is still valid).

Garnish Intangible Personal Property
The creditor can also collect on the judgment by garnishing debtor’s intangible personal property like bank accounts, wages, rent, accounts receivable, and other financial considerations owed to the debtor.  Additionally, a creditor may place a judgment lien an intangible negotiable instruments like stocks, bonds, debts, debtor’s causes of action, or other negotiable instruments.

In addition to the Writ of Execution discussed above, the creditor must file a “Summons in Garnishment.”  Virginia Code §8.01-502.  This notifies the financial institution or whoever is holding the debtor’s money (garnishee) that the creditor will be using the funds held by the garnishee to satisfy a judgment.  The summons must be served on the garnishee and the debtor.  The summons will instruct the garnishee not to release any funds to the debtor and give the garnishee a date to appear in court to contest the garnishment.  This date is at most 90 days from the date the writ was issued for all garnishments except for wages, which can be extended 180 days.  Virginia Code §8.01-514.  The garnishee may contest the garnishment.  The garnishee will be required to demonstrate why the garnishee should not be required to release the funds to the creditor and may use any legal defense that the garnishee could raise against the debtor – perhaps the funds were abandoned.  The garnishee need not appear in court unless the garnishee wants to contest the garnishment.  If the garnishee appears and does not contest, contests and loses, or does not appear in court, the court will issue an “order of payment” on the writ.  The order will instruct the financial institution to pay the funds to the creditor.

A creditor can also garnish wages, but the amount is limited to the lesser of :

  • 25% of debtor’s disposal earnings (after required deductions); or
  • the amount that debtor’s weekly disposal earnings exceed forty times the national minimum wage, which is currently $290 ($7.25 is the federal and Virginia minimum wage x 40).

Finally, for intangible personal property, the lien attaches to all property located in Virginia, so the creditor may deliver the writ to Sheriff’s Office before the creditor knows where debtor’s intangible personal assets are located.

Conclusion
Collecting on a judgment can be a complicated and frustrating experience for a creditor.  The debtor may have assets, but the creditor may not be able to locate them, the assets may not be sufficient to satisfy the judgment, or the debtor simply may not have any assets at all.  Fortunately, the creditor has options and many avenues to exhaust to collect on the judgment.  Please feel free to contact Steven Krieger Law, PLLC for a consultation.

Note: This post did not discuss the issues of priority (the order creditors get paid when there are multiple creditors with judgment liens attached the debtor’s assets), debtor interrogatories (requiring the debtor to testify under oath about debtor’s assets and liabilities – not as useful as it sounds), exemptions (some personal items and/or amounts are exempt from levy) and bankruptcy, which all can play an important role in collecting on a judgment.

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20 Responses
  1. It would be super helpful to know exactly how to place a lien on a shareholders account after a Writ of Fi Fa is issued. Is there someone that I could hire to just answer this question in detail for me over the phone? I understand there is a Notice of Lien but how does it actually attach? This is a Virginia case and I do already have a trial judgment against the debtor.

  2. I appreciated it when you shared that it is important to find out the assets that the debtor has as many as possible. In this way, you are able to ensure that the defendant will make payments for his debts. I would like to think if a company needs to collect its debts, it should consider working with a reliable service that can offer to do so.

  3. I’m glad you talked about how it could be harder to get your debt paid than to win your legal case. One of my cousins was involved in a legal situation, and we just found out that he won the case. The only problem is that the debtor to pay the quote. I’m not familiar with any legal procedure, so I think your article will help my cousin get more familiar with it. I appreciate you helping me learn about how collecting on a judgment works.

  4. Gentleman I have a judgement against my ex lawyer who reside in Virginia right now the Judgment was issued by superior court of New Jersey and I’m looking for a lawyer to help me collect these judgment you could email me or call me at 201-704-7844 looking forward to hear from you….
    Thank you have a pleasant afternoon

  5. I sued and won against my landlord for my deposit back it’s been a year-and-a-half not one dime .
    I am so tired of dealing with this character he’s a foreigner he owns property in Virginia and does a lot of wrong but I want my deposit back that’s it….so are you able to help with that.

  6. I got a judgment against my now evicted housemate for over $2500. I don’t know where she is living. I’ve paid the court fee ($90) to have her wages garnished. Knowing her, she will quit to avoid paying. I know where her furniture is being stored, but not the unit #. She gets Social Security & food stamps, but I know I can’t access that. I know she was trying to get money from the Salvation Army & church and probably has by now. Also, she had a case pending to get unemployment after she quit her previous job. If she gets either of those, can that be garnished? If she quits before the 6 months of garnishment is up, will I be notified? Is there any legal way to find out what funds she is getting? Thanks for any advice you can give. I am not the landlord, I have had to pay all this money myself to the landlord and utility companies, so it’s a big financial hit for me.

    1. @Lucie — The first step is to find her address b/c unless you can serve her with the garnishment papers as well as the employer or a bank, you won’t be able to collect the funds.

  7. I need to collect from a former landlord on whom I obtained a judgment in GD court in Chesterfield. Do you charge for services and can the debtor be made to pay, if so?

  8. I won a judgement a few years ago against a business that did not pay for some work that I did for them. the company moved its bank accounts and i have not been able to place a lien on its assets. i need to find an agency who can collect in a timely fashion. i understand that there is a commission, but willing to pay if able to collect.

  9. Thanks very much for the information! Most of this is new to me, like the fact that a creditor can garnish bank accounts, wages, and even rent owed to the debtor. Even knowing that this is done though, I would still probably need some help to actually make these suggestions a reality. I imagine there are judgement enforcement firms out there that specialize in helping a creditor collect.

  10. I would like to talk with someone about a court judgement placed on a renter/tenant for the collection of back rent in the amount of $2400.00 dollars. What are my options if there are any and what process do I have to go through in order to proceed in collecting this debt.

  11. I would like to speak with someone concerning an investment gone bad and what my options if any are in trying to place a lien on the borrowers assets ? I can be reached at 239-822-8240 – Thanks

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About the Author

Steven Krieger and guests (lawyers and non-lawyers) will periodically post about topics relevant to his firm and practice areas. Your comments and feedback are always welcome. 

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