If you have recently won a money judgment and are now preparing to begin collection efforts, did you know that you only have a limited amount of time to collect? It’s true. Most states put statutes of limitation on money judgments. If you do not collect within that amount of time, you have one of two options: allow your collection rights to expire or renew the judgment.
Letting collection rights expire doesn’t make a whole lot of sense if you have already put years into collection efforts. In addition, renewing a judgment isn’t difficult in most cases. So unless there are very good reasons to let a judgment go, you might just as well renew and continue trying to collect.
7-10 Years on Average
Most civil judgments are handled at the state and local level. Therefore, the states impose their own statutes of limitation on money judgments. Salt Lake City, Utah-based Judgment Collectors say the average is 7-10 years. Utah’s statute of limitations is 8 years. As a collection agency specializing in money judgments, Judgment Collectors could work on your case for up to 8 years before a decision needs to be made.
Renewing is usually a matter of filing a few forms with the same court that issued the original judgment. It is pretty much a formality. However, things can get complicated if the judgment has been domesticated in other counties or states.
In such cases, domestication would have to re-occur after the original judgment is renewed. So if you have domesticated in 7 additional jurisdictions, you would have to file with eight different courts. The original court for renewal and each of the other 7 courts for domestication.
If You Fail to Renew
Failing to renew a money judgment prior to exploration ultimately means allowing your collection rights to expire. In the state of Utah, you would no longer be able to collect beginning with the eighth anniversary of the judgment being entered.
Any collection efforts still ongoing at the expiration date would automatically cease. For instance, imagine you had garnished the judgment debtor’s wages. Garnishment would immediately cease when the judgment expires.
Some states review expired judgments as settled and paid in full. Others recognize expiring judgments as abandoned. As such, they are no longer enforceable.
One last thing to note in this regard is that you only need to file before the expiration date. If you file a week before expiration but the court can’t hear your case for a month, you are still good. You may have to temporarily suspend collection efforts for the three weeks in between, but renewal will restore your rights. You just need to file for renewal before the expiration date.
Making the Decision
The big question is how a judgment creditor would make the decision. It is really a matter of evaluating current circumstances and future prospects and then making a decision from there. One creditor might be dealing with a judgment-proof debtor whose circumstances haven’t changed since collection efforts first began. That creditor might be ready to just let it go.
Another creditor might be dealing with a debtor who has prospects for the future. He might be in line for an inheritance, for example. Renewal makes sense because there is still a good shot of getting paid.
If you are a judgment creditor preparing to begin collection efforts, bear in mind your state’s statute of limitations. Should you get close to expiration without having fully collected, you’ll have to decide whether you will renew or simply allow your collection rights to expire when the statute of limitations is reached.
