We’ve discussed the basic steps of a personal injury lawsuit in previous blog posts. In this post, we’ll concentrate on one of the steps that doesn’t receive as much attention as the others: receiving a civil judgment.
In addition to explaining what it means when we talk about a civil judgment, we’ll discuss how long a judgment lasts, whether a judgment can be discharged in bankruptcy, and some ways attorneys can enforce civil judgments.
What is a civil judgment?
A civil judgment is a final decision made by a court in a civil lawsuit. In a personal injury context, a civil judgment typically contains two important pieces of information:
- Who won the case, and
- The amount of money the defendant is ordered to pay the plaintiff (if applicable).
Here’s an example of what a typical civil judgment looks like:
SUPERIOR COURT OF THE STATE OF [STATE]
COUNTY OF [COUNTY]
Case No. 1234567
This action came before the court upon Plaintiff Jane Doe’s Complaint for Damages. The jury duly empaneled and sworn returned a unanimous verdict in favor of Plaintiff Jane Doe and against Defendant John Smith.
IT IS ORDERED AND ADJUDGED as follows:
- The Plaintiff, Jane Doe, shall recover from the Defendant, John Smith, the amount of $250,000 as awarded by the jury. This amount includes compensatory damages as compensation for injuries sustained by the Plaintiff due to the negligence of the Defendant.
- Interest is awarded at the statutory rate from the date of this judgment until paid in full.
- The Clerk is directed to enter this Final Judgment and to provide copies to counsel for the parties.
This Judgment disposed of all claims by all parties and is final for purposes of appeal.
SO ORDERED this day of [DATE].
Judge [NAME OF JUDGE]
Superior Court of the State of [STATE]
County of [COUNTY]
How long does a civil judgment last?
When a defendant complies with the terms of a civil judgment—usually by paying all of the money owed—the judgment is considered “satisfied.”
Unfortunately, defendants don’t always satisfy judgments immediately. For this reason, it’s important to understand that judgments don’t last forever. To put it another way, at some point, a judgment becomes unenforceable.
The duration of a civil judgment varies depending on the jurisdiction. In most states, a judgment lasts from 5 to 20 years and can often be renewed if the judgment hasn’t been fully satisfied. However, the specific time limits and rules for renewal depend on the particular state in which the judgment was filed, so it’s important to consult with an attorney in your area.
Enforcing a civil judgment
Just because a judgment is granted doesn’t mean the defendant can pay the amount that’s awarded to the plaintiff.
Consider the following example:
Linda is injured in a car accident caused by John. John doesn’t have car insurance, so Linda files a personal injury lawsuit against John.
After a three-day trial, the court rules in favor of Linda and awards her $100,000.
John is employed as a grocery store clerk and owns his home, but he doesn’t have any money in the bank. As a result, John refuses to pay the $100,000.
Is Linda out of luck? What options does she have to collect her judgment?
Fortunately, personal injury attorneys have some legal tools they can use to enforce judgments. Here are the most common tools:
- Wage garnishment: An attorney can get a court order to garnish a defendant’s wages. When a court orders a wage garnishment, it requires the defendant’s employer to withhold a certain percentage of the defendant’s wages, which are then directed toward the judgment debt. The maximum amount that can be garnished is limited by state and federal laws.
- Bank levy: An attorney can get a court order to freeze the defendant’s account, allowing funds to be withdrawn solely to pay the judgment.
- Lien on property: An attorney can place a lien on the defendant’s property, such as a home or plot of land. A lien is a legal claim that secures the payment of the judgment debt. If the property is sold, the proceeds will first be used to satisfy the lien before the remainder goes to the defendant.
- Seizure of personal property: In some cases, an attorney can obtain a court order to seize the defendant’s personal property, like a car or collectibles, which can then be sold to pay the judgment.
Do judgments accrue interest?
Interest is allowed to accrue on most judgments entered in federal and state courts. The interest accrues from the date of the judgment until the judgment is paid.
Each state sets a statutory interest rate on judgments. For example, in Washington, the statutory interest rate on most judgments is 12 percent, even if no interest rate is listed in the judgment.
The interest rate is typically expressed as an annual rate. This means, over the course of one year, a judgment amount of $100,000 granted in Washington will increase by 12 percent, which equates to $12,000. In other words, after one year, the debtor would owe the original judgment amount of $100,000 plus an additional $12,000 in interest, totaling $112,000.
Allowing interest to accrue is one way the courts encourage defendants to pay judgments promptly.
Do judgments appear on credit reports?
A civil judgment typically won’t appear on a defendant’s credit report and, therefore, typically won’t impact the defendant’s credit score.
Prior to 2017, judgments commonly appeared on credit reports in the United States. However, in 2017, the three leading credit reporting agencies—Equifax, Experian, and TransUnion—entered into a settlement agreement called the National Consumer Assistance Plan. As part of this agreement, judgments were required to meet strict identification criteria before being included in credit reports. Because this identification criteria is very difficult to obtain in most cases, the leading credit reporting agencies don’t typically include judgments on credit reports.
It’s important to keep in mind that this is a policy decision and not a legal requirement, so the reporting agencies could change their minds at any time and start listing judgments again.
Can judgments be discharged in bankruptcy?
When a debtor files for bankruptcy, the debtor can have certain debts “discharged.” In simple terms, this means the debtor is no longer required to pay the debt.
However, not all debts are dischargeable. For instance, debtors typically cannot discharge debts from:
- Child support or alimony
- Most student loans
- Certain taxes
- Fines, penalties, and restitution orders in criminal cases
- Debts not listed in the bankruptcy papers
- Some types of debts incurred shortly before filing for bankruptcy
When it comes to personal injury cases, two types of judgments typically cannot be discharged:
- Judgments for injuries caused by driving while intoxicated, and
- Judgments for injuries caused by willful, malicious, or intentional acts.
The type of bankruptcy also matters. In a Chapter 7 bankruptcy, many types of unsecured debt can be discharged. However, in a Chapter 13 bankruptcy, the debtor usually pays off some or all debts over time according to a repayment plan.
Given these complexities, it's essential to consult with an attorney who can provide advice based on your specific circumstances.
Can a judgment be appealed?
An appeal is a procedural device used to challenge the judgment or order of a trial court.
Civil judgments can be appealed so long as the appeal is filed within a certain period of time following the judgment.
The most important thing to understand about an appeal is that it is not a retrial or a new trial of your case. Appellate courts do not review new evidence or hear new witnesses testify. There is no jury. Rather, the appellate court reviews the procedures and decisions of the trial court to make sure the proceedings were fair and the proper law was applied based on the evidence that’s already in the record.