Obtaining a judgment in court is only the first step in pursuing delinquent accounts. While a judgment is a binding acknowledgement that money is owed, it does not actually force a debtor to pay. In light of that, and in order to combat a debtor’s avoidance efforts, there are some important things that need to be done after a judgment is entered to maximize the probability of collection.
Immediately upon obtaining a judgment in one county, a judgment creditor should transcribe the judgment to all other counties where the debtor resides or owns property. In North Carolina, judgments act as a lien on a debtor’s real property, but only in the county where the judgment is filed. For example, if a debtor owns real estate in Johnston County, but the judgment is only filed in Wake County, he could transfer that property without paying any part of the judgment. However, if the judgment has been transcribed to Johnston County, the creditor must be paid (or otherwise voluntarily release the property) before title can be transferred. By taking the time to determine where the debtor may own property, a creditor can increase its chances for recovery.
Similarly, creditors should periodically update their information for each judgment debtor and conduct an asset search. There are a couple of reasons why this is important. First, if the debtor has moved to a different county or acquired property in a different county, then the creditor can then transcribe the judgment to that county and obtain a lien on the property. Further, checking up on the debtor in this manner helps a creditor determine when would be an appropriate time to have a Writ of Execution issued to request a Sheriff to attempt to collect the judgment.
Gathering information with respect to a judgment debtor makes the post-judgment collection process more effective and efficient. It can increase the likelihood of collection or simply help a creditor determine whether to continue collection efforts.