Being awarded a judgment does not guarantee that you will collect money. The court is not responsible for collecting the judgment. If the judgment debtor (the losing party) does not voluntarily pay the judgment to the judgment creditor (the winning party), the judgment creditor may attempt to collect the judgment through the court process. Voluntary payments from the judgment debtor may be accepted any time.
If the judgment debtor makes payments to you directly, you should notify the court when payments are completed. Your court may allow the judgment debtor to make payments through the county court.
The clerk of the court has forms available to assist the judgment creditor in collecting the judgment by garnishing wages and bank accounts or execution against the property of the judgment debtor. When the forms are completed, the party seeking enforcement of the judgment must make arrangements for service of the forms:
- by sheriff for an execution
- by sheriff or certified mail for garnishments
If a case is appealed, you can begin collection proceedings while the appeal is being decided, unless the judgment debtor posts a supersedes bond – a bond which is equal to or greater than the amount of the judgment. If a supersedes bond is posted you must wait until the appeal is decided before attempting to collect on the judgment.
A garnishment allows the judgment creditor to obtain funds which are property of the judgment debtor but which are being held by a third party. For example, an employer may be holding wages belonging to the debtor. A garnishment served on the debtor’s employer may result in the lesser of the following amount being paid into court and distributed to the creditor:
- 25% of the debtor’s disposable income for the pay period; or
- 15% of his disposable earnings for the pay period if the debtor is a head of a family; or
- the amount by which the disposable income for a pay period exceeds 30 times the federal minimum hourly wage.
A garnishment of a bank account results in the total amount of the account up to the amount of judgment and costs being paid into court for distribution to the creditor.
Garnishment forms are available from the clerk of the county court. You must know the place of employment or bank with which the debtor does business.
An execution is a court order directing the sheriff to seize the debtor’s property for payment toward a debt. The creditor must determine exactly what property the debtor owns and describe it clearly so the sheriff knows what to look for. Ownership of motor vehicles and certain other types of personal property can be determined at the county clerk’s office. The county assessor and register of deeds office can also be used to locate other personal property and real estate owned by the debtor.
Any property seized for sale to satisfy the judgment is taken subject to the rights of any liens (claims) against that property. The lien holder will be paid before the creditor.
For example, if the debtor owns a car but has a bank loan outstanding and is using the car as collateral for the loan, the bank will be paid first with the proceeds of any forced sale of the car.
County court judgments do not operate as a lien against real estate. If the debtor owns real estate, a certified copy of the county court judgment may be filed in the district court of the county in which the real estate is located. The judgment then becomes a lien on the judgment debtor’s real estate.
After an execution is served and property is seized, the sheriff will advertise a time and place for the sale of that property. The proceeds of the sale will be applied to the expenses of the sale first and then to the judgment.
Beginning a Garnishment or Execution
When you begin a garnishment or execution, you will have to pay fees to the county court which will be added to the original judgment.
Both garnishments and executions are risky for the creditor. Unless the property or debt sought to be garnished is readily apparent, you should talk to a lawyer before trying to enforce your judgment. A lawyer may prepare and file the necessary papers to collect your judgment. A wrongful execution or garnishment may result in a lawsuit being filed by the debtor or some other offended party. The amount of that suit could be significantly greater than the original judgment. If you have any doubt about collecting your judgment, consult your lawyer.
*Some of your property is exempt by law from either garnishment or execution. You shall have exempt from forced sale on execution the sum of $2,500 in personal property, except wages. The immediate personal possessions of you and your family; all necessary wearing apparel; $1,500 in household furnishings, goods, computers, appliances, books or musical instruments; $2,400 in implements, tools, or professional books or supplies for use in your principal trade or business; and prescribed health aids for you and your family are exempt from execution. Wages in excess of the limits previously discussed under garnishments are protected by law. Also, some income such as social security payments is totally exempt from garnishment.
If you have been served with a garnishment and believe that some or all of the property sought should be exempt, complete the request for hearing on the Notice to Judgment Debtor.
*If your wages or accounts are garnished or an execution is entered against your property, consult an attorney who can advise you how to protect yourself. It is your responsibility to notify the court of claimed exemptions, and these exemptions must be claimed to prevent the property being applied against the judgment.
If a judgment has been entered against you from a claim that involved a motor vehicle accident, you must make sure the person who sued you notifies the court when you have paid that judgment in full. If the court is not notified within 90 days after the day the judgment is entered, the clerk of the court is required to send a copy of the judgment to the department of motor vehicles. The director of motor vehicles will then suspend your driving privileges and revoke your automobile registration until the court has proof the judgment has been paid.
If you have a claim against an individual but are aware that the claim is listed as a debt in a bankruptcy proceeding, you are prohibited by federal law from pursuing your claim in small claims court or pursuing collection on a judgment. Parties who knowingly pursue a claim listed in bankruptcy may be held in contempt by the federal bankruptcy court.
A defendant in bankruptcy who receives notice that he or she is being sued or that collection efforts are being made on a judgment previously entered should notify the court. The defendant must then provide proper documentation showing the existence of the bankruptcy proceedings and that this claim is included. The court will then stay all proceedings related to the case until the bankruptcy case has been dismissed. The clerk of the court has available a copy of the Nebraska Supreme Court rule on Bankruptcy.