Skip Navigation

6310 Hillside Court
Suite 160
Columbia, MD 21046

P. 410-290-0707

 

 

Baltimore, MD 

P. 410-962-1199

Post Judgment Enforcement: options and costs

You have spent your time in court and spent your money on counsel to successfully obtain a money judgment.  The clerk has entered your judgment, the debtor has not filed an appeal, and the 10 day automatic stay of enforcement period is over. Now you are faced with a new problem: the debtor won’t pay.    

There are several options available to a judgment creditor to aid in collection of a judgment that involves the court system.   

1. Discovery in Aid of Enforcement.  Discovery in aid of enforcement allows a creditor to use interrogatories, requests for documents, and depositions to locate assets of the debtor.  The judgment creditor may also request the court issue an order requiring the judgment debtor, or its representative, appear before a judge for examination under oath to be questioned regarding the assets of the debtor.  The failure of a judgment debtor to appear can result in that person being held in contempt. MD Rule 2-633 and 3-633.  

2. Liens on real property.  In the Circuit Court, once recorded and indexed, a judgment constitutes a lien from the date of entry on the judgment debtor’s real property in the jurisdiction where the judgment was recorded. The lien automatically attaches to any property owned by the judgment debtor. MD Rule 2-621. If a judgment debtor owns property in a different county than where the judgment was recorded and indexed, a copy of the judgment may be transmitted to that county and recorded. MD Rule 2-622.  In the District Court, liens do not automatically attach to real property owned by the judgment debtor.  The judgment creditor must request a lien be recorded and must request a certified copy of the judgment be transmitted to each county where the judgment debtor owns property. MD Rule 3-621 and 3-622. A request to file lien must then be requested in that county.

3. Writ of Execution. A writ of execution is an order directing a sheriff to seize and sell property of a judgment debtor in order to satisfy the judgment.  The sheriff is directed to either leave the property where it is located, exclude others from accessing the property, or to remove the property from the premises. MD Rule 2-641 and 3-641.  The sheriff will also conduct an appraisal of the property. MD Rule 2-642 and 3-642.  Thirty days after the levy, the sheriff may sell the property if directed by the judgment creditor, at a public sale after posting notice. MD Rule 2-644 and 3-644.

4. Garnishment of Property.  A writ of garnishment allows a judgment creditor to receive property that belongs to or is owed to the judgment debtor, but that is in the possession of a third party.  The most commonly seen garnishment of property is the garnishment of a debtor’s bank account.   Once a writ is issued by the court, it must be served on the third party thought to be in possession of the property, also known as the Garnishee.  The Garnishee must provide a formal answer within 30 days after receipt of the writ, either admitting or denying possession of the debtor’s property.  If property is confirmed and Garnishee has no defenses, the judgment creditor may request the court issue an order directing the Garnishee to release the property of the judgment debtor directly to the judgment creditor to satisfy the judgment. MD Rule 2-645 and 3-645.

5. Garnishment of Wages.  A writ of garnishment of wages allows a judgment creditor to receive a certain portion of a judgment debtor’s wages.  The employer, or Garnishee, is required to send the amount of attachable wages directly to the judgment creditor.  MD Rule 2-646 and 3-646. The procedure for obtaining a writ of garnishment of wages is similar to the procedure for a writ of garnishment of property.  The amount of attachable wages is set forth in the MD Commercial Law Article, sections 15-601 to 15-606.  If more than one garnishment of wages is received by the Garnishee, they will be satisfied in the order received.

6. Charging order.  A charging order is a judicial remedy that “charges” the interest of a member in an LLC or the interest of a partner in a partnership with the payment of an unsatisfied judgment held against that member or partner.  The share of member or partnership profits and any other money that becomes due to the member or partner by reason his or her interest is then payable to the judgment creditor.  MD Rule 2-649 and 3-649. 

7. Other enforcement procedures.  If a judgment debtor or Garnishee fails to comply with any of the court ordered directives listed above, that person may be held in contempt of court. MD Rule 2-648 and 3-648.

While there are several options available for a judgment creditor to aid with collection, there are costs and depending on the fee arrangement with counsel, additional attorney’s fees associated with pursuing the above collection avenues.  The default rule for attorney’s fees in the U.S. is that each party is responsible for its own fees regardless of whether the party wins or loses.  The losing party, under certain circumstances, may be liable to pay the winning party’s attorney’s fees if the reallocation is provided for by specific statutory authority, or if it is specifically contracted for between the parties.   

In September 2011 a decision from the Court of Special Appeals, the Court denied post-judgment attorney’s fees pursuant to a contract provision in SunTrust Bank v. Goldman, 201 Md.App. 390 (2011).  In SunTrust, the contract provided that the defaulting party was responsible for “costs of collection, including court costs and fifteen percent (15%) of the principal plus accrued interest as attorney’s fees.” Id at 394. The Plaintiff attempted to argue that the fifteen percent (15%) figure was to cover pre-judgment and post-judgment attorney’s fees. Under the rule of merger, when judgment is entered pursuant to a contract, the contract is merged with the judgment and all the rights available and enforcement of liabilities rooted in that contract are terminated. Id at 402.   The effect of the rule of merger is that any contractual right to further attorney’s fees is terminated at the time of judgment because attorney’s fees recoverable under a contract are a part of the damages claim, and therefore, cannot exist as an independent cause of action after the contract is merged with the judgment.  Id at 402-403 (citing AccuBid Excavation, Inc. v. Kennedy Contractors, Inc.  188 Md.App. 214 (2009)).  The Court in SunTrust did indicate the possibility of exceptions to the doctrine of merger.  One exception deals with statutory authority that expressly provides for recovery of post judgment legal fees. Id at 403-404. Another possible exception is a carefully drafted contract that indicates the provision for post-judgment attorney fee recovery will survive merger.  Id at 404-405.

What does SunTrust mean for a judgment creditor? Depending on the fee arrangement with counsel, regardless of whether or not your contract allows for recovery of post-judgment attorney’s fees associated with collection, if you do not qualify for an exception you may be paying out of pocket to recover your judgment.

Related article: Accounts Receivable Basics: Interest, Attorneys' Fees and Limitations

BTLG Attorneys At Law

Talk to a lawyer

Bold labels are required.

News from BTLG:

Expansion of Definition of Race to Include Hairstyles
Effective October 1, 2020, the definition of race under Maryland discrimination laws has been expanded to also include hair styles
Maryland Economic Stabilization Act (“Mini Warn Law”)
Effective October 1, 2020, Maryland employers who employee 50 or more individuals are required to comply with updated mandatory provisions of the Maryland Economic Stabilization Act (“Mini Warn Law”)
Insurance Coverages for Businesses: Will your insurance cover you for a coronavirus-related loss?
Some insurance policies may allow for claims on coronavirus related losses
Maryland closes restaurants, gyms and theaters
Maryland Governor Hogan issued an Executive Order with further direct impact to Maryland business
More BTLG News