When a creditor needs to take a debtor to court in order to have a debt repaid, the difficult part is not necessarily over. While winning a civil case in court against a debtor can be a relief for a creditor, simply winning a case does not guarantee that the debtor will pay. Once you win the case, it is time to collect the debt.
In some cases, the debtor—now known as the judgment debtor since you have won a civil case against that person or entity—will pay what is owed. However, if the debtor does not pay, the creditor typically will need to take steps to collect. Here, our Iowa creditors’ rights lawyers provide an overview of three common ways to collect a judgment from a debtor.
Garnish the Debtor’s Wages
Wage garnishment is a legal process through which money is withheld from one person’s paycheck and sent to another party. Creditors may be able to enforce a legal judgment through wage garnishment. That being said, there are strict requirements for doing so. Under Iowa law (Iowa Code § 642), debtors can only have a portion of their net wages garnished during a calendar year. Beyond that, creditors considering enforcing a judgment through wage garnishment must comply with the state’s notification requirements. Failure to follow the proper procedures could undermine your ability to enforce a judgment.
Levy the Debtor’s Bank Account
If you obtained a judgment against a debtor, you may be able to levy the debtor’s bank account in order to collect the debt. What does it mean to levy a bank account? In short, you can take non-exempt money directly out of the debtor’s bank account to recover what you are owed. Under Iowa law, there are exemptions. Certain funds in a bank account are protected.
Place a Lien on the Debtor’s Property
A lien is a claim that the creditor can place on the debtor’s property. This means that if the debtor attempts to sell the property or refinance the property, the debtor will need to pay the creditor with any proceeds from that sale before keeping any of those proceeds for themselves. Further, as explained by Investopedia, property subject to a lien could eventually be seized—though, doing so can be complicated. While a lien will not always immediately provide a creditor with the money owed, it can at times ensure that the creditor ultimately will be paid. It can be a useful tool in helping to produce compliance with a judgment or a settlement.
Call Our Iowa Creditors’ Rights Attorneys Today
At Telpner Peterson Law Firm, LLP, our Iowa creditor representation attorneys provide skilled, effective legal representation to clients. We can help you devise the best strategy to collect on a delinquent debt. To set up a completely confidential, no obligation initial consultation, please contact us today. With a law office in Council Bluffs, we serve communities throughout Southwest Iowa, including in Pottawattamie County, Harrison County, Mills County, Shelby County, and Montgomery County.