Houston Attorney Paul Sternberg explains how to handle a money judgment entered against a company
In order to seek a money judgment against a company, a creditor or collector must take the company to court. If the company fails to respond to a summons, or if the company loses its case, the court will issue a money judgment in favor of the creditor or collector. The judgment will then be filed with the court, at which point it becomes public record.
“A client recently asked me, ‘I’ve just had a money judgment entered against my company. How long before the other party can collect on it, and what are my options if the company doesn’t pay the whole amount?'” reveals Paul Sternberg, an attorney and real estate investor from Houston, Texas.
Assuming that no post-judgment motions or appeals have been filed, the judgment of the court becomes final thirty days following the date on which the order was signed, Sternberg explains. Under most circumstances, he says, the thirty days must pass before a money judgment creditor can attempt to collect from a company.
“Therefore,” Houston-based Sternberg adds, “a company should be clear until day thirty-one.”
He continues, “That being said, as with almost every legal matter, there are a number of exceptions. A money judgment creditor, for example, may seek an abstract of judgment immediately following the order being signed in an effort to more promptly collect on the judgment.”
According to attorney Sternberg, once an abstract of judgment is filed—and recorded—it creates a lien on all of a company’s commercial property. “Additionally,” he reveals, “a judgment creditor can immediately begin post-judgment discovery processes and attempt to obtain information about a company’s assets which may be subject to recovery to satisfy the judgment.”
To avoid this, Sternberg advises working out a reasonable settlement with the judgment creditor, pointing out that a creditor typically only wishes to have the judgment and costs satisfied. “If a company makes an attempt to work with them, they may be open to organizing payment arrangements,” he adds.
Under such conditions, Houston’s Paul Sternberg is keen to stress the importance of only making payments from a source which can be reliably tracked, such as a money order or cashier’s check, sending payments via certified mail with a return receipt requested.
“Most important of all,” he adds, “a company must seek an acknowledgment or release of judgment as soon as it has finished paying what was agreed upon to satisfy the original judgment.”
THIS ARTICLE SHOULD NOT BE RELIED UPON AS LEGAL ADVICE.
Attorney Paul Sternberg, of Houston, Texas, states and declares that the above text is not offered as legal advice, but is provided as general information. The information contained within may not be suitable for all individuals or situations. No attorney-client relationship is created or implied by the provision of this information, nor does the aforementioned make any warranties, whether expressed or implied, of any kind. To discuss a particular situation in more detail, please contact attorney Paul Sternberg for a consultation by calling 713-392-4322.