There are four methods that a judgment creditor may utilize in order to collect on monies that it he or she is owed. But the judgment creditor must be aware that there are certain assets that are exempt from collection.
Methods of Collection of a Judgment
In analyzing this issue, there are two questions to be answered. The first is what actions a judgment creditor can take to try to collect assets from a debtor. The second is whether there any assets that are exempt from these collection efforts.
In general, there are four methods that a judgment creditor may utilize in order to collect on monies that it he or she is owed. The judgment that a judgment creditor receives from a County Court is valid for six years, unless it is revived. See, C.R.S. ? 13-52-102(2)(b)(I). A judgment received from a District Court is valid for twenty years. See, C.R.S. ? 13-52-102(2)(a). The judgment creditor must take affirmative action to collect on its debt; a Court will not collect on behalf of the judgment creditor.
The first, and most common way a judgment creditor may collect on its debt, is to have the wages or salary of a judgment debtor garnished. This is effectuated by obtaining an order from the Court to garnish a judgment debtor's wages, and then serving this order on the employer of the judgment debtor. The order from the Court will include the amount of the judgment, in addition to interest and costs; therefore the amount of the order will be higher than the judgment. Once the employer is served with this Order, the employer is obligated to withhold a certain sum of money from the judgment debtor's wages each pay period. Garnishment is based on a calculation used to determine "disposable earnings", in a similar way in which the term is used for tax purposes. C.R.S. ?13-54-104. Then the disposable earnings figure is used to calculate a percentage. A garnishment is good for 180 days, after that the process must be renewed.
A second method available to a judgment creditor to collect on its judgment is to garnish personal property of the judgment debtor.
A third method available to the Judgment creditor is a lien against real property owned by the indebted party. C.R.S. ? 13-52-102. Once a lien is recorded, the judgment creditor technically has the right to execute on the property by sale, in order to satisfy its judgment.
The final option that may be used to satisfy a judgment is a writ of execution. A writ of execution is an order by the court to allow the sale of personal property owned by the indebted party. A common example of its use would be when a creditor takes a person's car to satisfy judgment.
Assets that are Exempt from Collection
As mentioned above, in analyzing this issue, there are two questions to be answered. The first is what actions a judgment creditor can take to try to collect assets from a debtor. The second is whether there any assets that are exempt from these collection efforts.
The second question to be answered is what assets are exempt from sale to satisfy a judgment creditor's debt. This is applicable to the last three methods discussed above. As discussed in the section related to garnishment of wages, there is a separate method for calculating wages exempt from collection by the Judgment debtor. The Colorado statutes identifies many of the different types of property of an indebted party that is exempt from collection to satisfy a judgment. See e.g., C.R.S. ? 13-54-102. Other exemptions are found throughout the code and in federal law.
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