5 Steps How to Collect a Judgment in Pennsylvania.
I have a Judgment, How do I Collect?
First things first, if you can settle when money is owed, it is always worth considering. The goal of debt collection in Pennsylvania is to collect money. Collecting debt is about making smart business decisions and analyzing collectibility should be part of every preliminary debt collection process. This article is to help you collect money owed by deciding what to do after obtaining a money judgment.
The 5 Steps
- File Your Judgment With the County Courts
- File Your Writ of Execution (The Key for the Sheriff)
- Seize Bank Accounts by Sending Questions to the Banks
- Levy and Sell Personal Assets and Vehicles
- Levy and Sell Real Property / Land
Step 1: File your Judgment (in any and all counties where the debtor resides or owns property)
A judgment is a legal determination by the courts that money is owed from one party to another. An award or verdict are not the same thing as a money “judgment”. Even if you win a lawsuit, you can not force collection remedies until a Praecipe to Enter Judgment is actually filed with the local county courts in Pennsylvania. This document called a “Praecipe to Enter Judgment” is governed in part by PA R.C.P. Rule 237.1.
File Your Judgment in each and every county the debtor resides or owns property. You could be paid years later.
Step 1 to collect a judgment in Pennsylvania is to file the judgment in each county where the debtor resides or owns real property. Real property means a house or land. There are 67 different counties in Pennsylvania, and it is important to actually file (meaning domesticate) your judgement in each and every county which the debtor owns property. This will often require a title search, credit report or other property background search to investigate what the debtor(s) actually own.
The reason that you need to domesticate a judgment in each county is because judgments in Pennsylvania only act as an automatic lien against real property if the judgment is properly filed in that specific county. This means that the debtor can not sell their property without satisfying the judgment first. These judgment liens on property are valid for twenty (20) years in Pennsylvania. However, if you file your judgment in Allegheny County, and the debtor owns property in another county (i.e. Beaver County), the judgment would not act as a lien in the neighboring county. Filing judgments can help you collect even years later, by remaining as a lien against the defendants property.
Although a judgment may act as a lien against real property for twenty (20) years, you cannot seek to execute on your judgment unless it is revived every five (5) years. Therefore, we strongly encourage creditors to also revive their judgments at least once every 5 years by filing a revival of judgment with the respective county department of court records or Prothontary’s Office.
Also, be careful about magistrate judgments. Magistrate courts are the lowest court system in Pennsylvania, and allow money judgments up to $12,500.00. However, Magistrate judgments are not always identified by credit reporting agencies and will often not show on credit reports. Thus, you may have a judgment that is NOT acting as a lien. If you have a magistrate judgment, you should also always file the judgment with the county courts where the debtor resides or owns property. You need to make sure the judgment is filed with each and every county court where the defendant may own property or assets.
Step 2: File a “Writ of Execution”
If entering your judgment with the county courts does not apply pressure to collect, then you can use the Sheriff’s Office of each specific county to help force the debtors to pay. Understand that the sheriff will not take action until a writ of execution is filed with the county and they receive the original writ and a Sheriff Instruction Sheet (sometimes provided by each respective Sheriff’s office).
Step 2 to collect a judgment is to file with the department of court records a praecipe for a writ of execution. The writ is the “key”which allows the Sheriff to execute on a judgment. Remember, the actual writ is filed with the county courts first, and then the original writ (with a stamped seal on it) must be delivered to the Sheriff’s office. The writ authorizes the sheriff’s office to take certain action to collect the monies against the debtor. When you file a writ of execution you are then directing the sheriff to take some additional action concerning the judgment.
These actions consist primarily of:
- Seizing a bank, credit union or monetary account; (this will require specific directions concerning the bank or garnishee)
- Selling personal assets, and/or vehicles; (one again, requiring a specific location to VIN #) and/or
- Selling a house, land or real property.
These are generally the most often used instructions associated with writs of executions directed to the Sheriff’s office and are more fully discussed below.
Step 3. Seize Bank Accounts
Seizing bank accounts freezes the accounts immediately. Step 3 to collect a judgment is to seize money from banks or third parties who may owe the debtor money.
To seize a bank account in Pennsylvania, you must take the following steps:
- Enter the judgment;
- Obtain a writ of execution;
- Deliver the writ of execution and “interrogatories to the garnishee” to the sheriff; and
- Direct the sheriff (through Sheriff instruction sheet) to serve the writ of execution and interrogatories to the garnishee.
The garnishee is the bank or other party who may have money owed to them from the debtor. This could include tenants if the debtor has rental property or money owed from a lawsuit or otherwise.
The “interrogatories to the garnishee” are a legal pleading asking the bank whether or not they are holding any money of the debtor. An example of “interrogatories to the garnishee” can be seen by clicking on this link.
The best part about seizing bank accounts is that the debtor’s accounts are immediately frozen once the sheriff serves the writ of execution and interrogatories to the garnishee.
You should note that marital bank accounts are exempt from attachment. The garnishee (most often the bank) is required to answer the interrogatories within 30 days. This should specifically inform you as to whether or not the debtor actually has money at that bank. If they do, the bank should release the money voluntarily (less $300 statutory exemption). if the bank does not release the monies, then the creditor can actually enter judgment against the garnishee and follow the same execution procedures against the garnishee.
Step 4. Have the Sheriff Levy and Sell Assets and Vehicles.
In addition to seizing bank accounts, you can also have the sheriff levy and sell personal assets of the debtor to collect a judgment in Pennsylvania. Personal assets can include furniture, tv’s, jewelry, guns and firearms, other valuables or antiques. Typically, you cannot seize retirement accounts or pensions.
The procedures for selling personal assets of the debtor are similar to seizing a bank account.
- Record the judgment in the county where the assets are located;
- Obtain a writ of execution from the county Prothonotary;
- Deliver the original sealed writ of execution and a “sheriff direction forms” to the sheriff; and
- Direct the sheriff serve the writ of execution.
With personal assets, the sheriff serves the writ of execution and then takes an inventory of all assets to set for a sale. The procedure is called a levy. Once the levy is performed (i.e. the Sheriff takes an inventory of the assets), it is illegal for the debtor to remove any of the items listed and can face criminal charges if they do. This includes any levy taken on personal assets and/or vehicles.
The sale of the assets is usually scheduled within a few weeks of the levy and third parties are allowed to file claim exemption forms objecting to the sale. If 3rd parties show for the sale, they can must bid a minimum of the judgment amount plus costs. If no one bids high enough or no one shows at the sheriff sale, then the creditor can bid the amount of the costs as an offer for the assets, retain possession and sell the assets as they seem fit. This includes taking immediate possession and then selling the assets directly at the sale who did not bid up to the judgment amount.
You can also collect a judgment by seizing vehicles in the same procedure. When it comes to vehicles, creditors have the option of having the vehicle towed at the same time the vehicle is levied upon. Consideration should take place considering whether the vehicles have liens before levying and/or towing them.
Most of the time assets (personal property or cars) are levied, debtors try to resolve the debt, but if they do not and the execution actually moves forward to sheriff sale, then the creditor needs to be prepared (usually with a large van or truck) to take possession of any and all assets which were levied on. Meaning the Sheriff will sell them to you for just the costs for the sale (typically very low), but you better be ready to take possession and transfer the assets as well.
Step 5. Force a Sheriff Sale of any Land or Real Property Owned by the Debtors.
Finally, you can collect a judgment in Pennsylvania by forcing a sheriff sale of the defendants real property.
This is significantly more costly than seizing a bank account or levying on personal property (est. $2,000 to $3,000 more in court costs) but can very effective and profitable if the debtor owns real property. Each of the 67 counties in Pennsylvania have different costs, forms and policies as to how Sheriff Sales of real property are handled.
Before considering a sheriff sale of real property, you must always do a title search first (estimated cost $150) and a mortgage search with the respective county.
The advantages of a real property sale is that in theory you can take possession of a debtor’s property for the cost of your judgment even if the property value exceeds the value of the judgment. This means you could actually profit on a potential resale of the property.
The possible disadvantage of a real property sale is that it is quite possible that other creditors have liens ahead of your judgment. That means that they would get paid first at your expense. It would make little sense to try to force a sale of a property if the property is already attached with a mortgage or encumbrance that exceeds the value of the property.
Sheriff’s sales are a great idea when there is equity in real property owned by the debtor. As stated, this must be verified by a title search and mortgage search first. It is also almost always a good idea to have an appraisal of any real property before proceeding with a sheriff sale against it.
The goal is getting paid. The best ways to collect a judgment in Pennsylvania is to:
- Enter Your Judgment, and domesticate your judgment in each county where the debtor resides or owns real property;
- Issue a Writ of Execution with the department of court records in that specific county;
- Have the Sheriff Serve the Writ Of Execution to seize bank accounts by serving interrogatories to any garnishee holding monies of the debtor;
- Have the Sheriff Serve the Writ Of Execution to levy and sell any and all personal assets or vehicles which the debtor owns; and
- Have the Sheriff Serve the Writ Of Execution to levy on any and all real property the debtor owns.
If you have questions about a Pennsylvania debt collection case, please feel free to contact us for free consultations and would be happy to help.
This article is written for entertainment purposes only. It should not be relied upon for legal advice. Please read full legal Disclaimer.