Civil courts are capable of issuing a variety of different orders that ultimately aid judgment creditors in their efforts to collect. One such order is a turnover order. It is similar to a rid of execution in some ways but quite different in others. A turnover order represents a way to leverage assets for payment when other options have failed.
What a Money Judgment Does
A money judgment is one of many different types of judgments that can be rendered in civil court. It does a couple of things. First and foremost, a money judgment recognizes a legal debt owed by the losing party along with the winning party’s right to collect that debt.
In some cases, a money judgment is designed to be punitive in nature. It is punitive in the sense that its size encourages the defendant, and others as well, to not repeat the action that led to the lawsuit. Punitive amounts are intended as deterrents to future behavior.
How Creditors Collect
Once a money judgment is entered, the winning party (a.k.a., the judgment creditor) is left with a responsibility to collect. According to Salt Lake City’s Judgment Collectors, a Utah judgment collection agency active in nearly a dozen states, judgment creditors have options:
- They can negotiate a lump sum payment or monthly installments.
- They can garnish the debtor’s wages and bank accounts as allowed by state law.
- They can file liens against nonexempt property or seek writs of execution.
These are the most common tools judgment creditors rely on to collect. So what about the turnover order? It is an order that allows creditors to go after certain types of nonexempt assets that are harder to leverage using a standard writ of execution or garnishment.
How the Order Works
A garnishment order compels a debtor’s employer or bank to set aside funds that will be used to pay an outstanding judgment. Employers set aside wages while banks set aside cash assets in a debtor’s accounts.
Meanwhile, a writ of execution orders the local sheriff to seize the named property, sell it at public auction: and forward the proceeds to the judgment creditor. Every now and again a creditor is interested in assets that are harder to go after. This is what the turnover order is for.
A turnover order is a court order compelling the debtor or a third-party in control of named assets to surrender those assets to the sheriff. It is necessary because the assets are either not subject to garnishment or involve circumstances that make seizing them via a writ of execution impossible.
Cash Is a Good Example
Cash is a good example of an asset that would be seized through a turnover order. Imagine a defendant who knows he is likely to lose his case. He is also aware of garnishment laws in his state. While the court case is ongoing, he empties his bank accounts and gives the cash to a family member to hold for him.
Also imagine that a creditor learns all of this through the debtor social media accounts. The debtor is now aware of the cash but, because it is being held by a third party, it cannot be accessed through garnishment or a rid of execution. But a turnover order compels the third-party to surrender the cash.
The turnover order gives judgment creditors yet another tool to secure payment. When used wisely, it can go a long way toward getting an unpaid judgment settled. To the debtor, it represents yet another opportunity for losing assets by refusing to pay what is rightfully owed.
