When a defendant does not pay a court judgment, the judgment does not go away and the court does not collect the money for the winning party. Instead, the judgment creditor gains legal authority to pursue the debtor’s income and assets through tools like wage garnishment, bank account levies, property liens, and sheriff’s sales, while post-judgment interest continues to grow the balance. A debtor who ignores court orders connected to the judgment, such as a debtor examination, can also face a bench warrant for arrest. The specifics turn on the type of judgment, the debtor’s finances, and state law, but sitting on an unpaid judgment almost always makes the debtor’s position worse.
The Balance Keeps Growing
Interest begins accruing the moment the judgment is entered. In federal court, the rate equals the weekly average one-year constant maturity Treasury yield for the week before the judgment date, compounded annually and calculated daily until the debt is paid.1Office of the Law Revision Counsel. 28 U.S. Code 1961 – Interest State courts set their own statutory rates, and some are significantly higher.
The practical effect: a $50,000 judgment can grow by thousands of dollars each year it goes unpaid. That is why creditors are often willing to wait, and why a debtor who can pay is usually better off paying sooner.
How Creditors Force Collection
None of the enforcement tools below run automatically. The creditor has to file the right paperwork, pay a court fee, and serve the appropriate party. But once served, each tool works quickly.
Wage Garnishment
A garnishment order is served on the debtor’s employer, who then withholds part of each paycheck before the debtor sees it. For ordinary consumer debts, federal law caps the take at the lesser of 25% of disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage of $7.25 per hour, which puts the floor at $217.50 per week.2Office of the Law Revision Counsel. 15 U.S.C. 1673 – Restriction on Garnishment If weekly disposable earnings fall below that floor, nothing can be garnished.
Support obligations follow different rules. Garnishment for child support or alimony can reach 50% to 65% of disposable earnings depending on whether the debtor supports other dependents and whether the support is more than 12 weeks overdue.2Office of the Law Revision Counsel. 15 U.S.C. 1673 – Restriction on Garnishment Many states protect debtors further.
Bank Account Levies
A creditor can get a court order directing the debtor’s bank to freeze funds and turn them over. The freeze typically hits as soon as the bank receives the order, which means the debtor may lose access to money for rent or groceries with no warning. Federal benefits deposited by direct deposit get automatic protection: the bank must shield the lesser of two months’ worth of federal benefit deposits or the current balance from any garnishment order.3eCFR. 31 CFR Part 212 – Garnishment of Accounts Containing Federal Benefit Payments Social Security, veterans’ benefits, and similar federal payments fall inside that protection.
Property Liens
A judgment lien attaches to real estate the debtor owns once the creditor records the judgment with the county recorder where the property sits. The lien follows the property; if the debtor tries to sell or refinance, it must be paid out of the proceeds first. In many jurisdictions, the lien also attaches to real estate the debtor acquires later. That is why a judgment can shadow a debtor for years even when they own nothing on the day it was entered.
Seizure and Sale of Personal Property
The creditor can ask the court for a writ of execution, which directs a sheriff or marshal to seize non-exempt personal property and sell it at public auction.4Legal Information Institute (LII). Writ of Execution Vehicles, equipment, and valuable items are the usual targets. Auction proceeds pay the judgment and the sheriff’s costs, with any surplus going back to the debtor. Seized personal property rarely fetches much, so this route works best against debtors with genuinely valuable items.
Debtor Examinations
A creditor who does not know what the debtor owns can ask the court to order a debtor examination. The debtor must appear and answer questions under oath about income, accounts, and property. The creditor uses the answers to choose the next enforcement tool. In federal court, the creditor can also subpoena banks, employers, and other third parties for the debtor’s financial records.5Legal Information Institute (LII). Federal Rules of Civil Procedure Rule 69 – Execution
When Ignoring the Court Becomes the Bigger Problem
Owing money on a judgment is not a crime. Deliberately disobeying a court order tied to the judgment is a different matter. The classic scenario is a debtor who fails to show up for a court-ordered debtor examination. The judge can then issue a bench warrant. Once arrested, the debtor is brought before the court and has to explain why they should not be held in contempt.
Contempt penalties can include fines and jail time.6Legal Information Institute (LII). Contempt of Court Civil contempt is meant to coerce compliance, so the debtor can usually end the penalty by doing what was ordered. Criminal contempt punishes the defiance itself with a fixed sanction. Either way, this is one of the easier consequences to avoid: show up when the court says to.
If the Debtor Genuinely Has Nothing
Some debtors have no job, no bank account, no property, and income only from exempt sources like Social Security or disability. These debtors are sometimes called “judgment proof.” The judgment stays valid and enforceable, but at that moment there is nothing the creditor can legally take.
The status is not permanent. Judgments remain active for years, and if the debtor’s situation improves, collection resumes. A new job invites garnishment. A house invites a lien, and a lien already recorded against the debtor’s name can attach to real estate bought years later. This is why financial advisors often recommend that even judgment-proof debtors consider a negotiated settlement or bankruptcy rather than simply waiting the creditor out.
How Long the Creditor Has
Every judgment has an enforcement window set by state law, and it is usually longer than debtors expect. Windows run from five years to 20 years or more depending on the state. Many states let creditors renew judgments before they expire, resetting the clock, and some allow renewal repeatedly, keeping a judgment enforceable for decades. Renewal generally means filing paperwork and paying a modest fee before the current period runs out. If the creditor misses the deadline, the judgment expires, though the underlying debt itself may still exist.
Moving does not solve the problem either. Under the Uniform Enforcement of Foreign Judgments Act, adopted in some form by most states, a creditor can domesticate a judgment by filing an authenticated copy in the new state’s courts. Once domesticated, it is enforceable there like any local judgment. The debtor usually gets a short window to object before enforcement can begin.
What the Debtor Can Still Do
Appeal, But Enforcement Continues Unless Stayed
A debtor who believes the judgment was wrongly entered can appeal, but filing an appeal by itself does not stop collection. To pause enforcement, the debtor typically has to post a supersedeas bond or other security equal to the judgment amount, sometimes plus interest and costs.7Legal Information Institute (LII). Federal Rules of Civil Procedure Rule 62 – Stay of Proceedings to Enforce a Judgment The bond guarantees payment if the appeal fails. In federal cases, the request for a stay goes first to the trial court; if it is denied or the situation is urgent, the debtor can ask the appellate court directly.8Legal Information Institute (LII). Federal Rules of Appellate Procedure Rule 8 – Stay or Injunction Pending Appeal Posting a bond equal to a large judgment is out of reach for many debtors, so enforcement often proceeds while the appeal is pending.
Bankruptcy
Bankruptcy can eliminate or restructure judgment debt, but not every judgment qualifies. Chapter 7 liquidates non-exempt assets and discharges most remaining unsecured debts, potentially wiping out a money judgment. Chapter 13 reorganizes finances into a three-to-five-year repayment plan, with qualifying remaining debts discharged at the end.
Some judgments survive either chapter. Domestic support obligations such as child support and alimony cannot be discharged. Judgments based on fraud, embezzlement, or willful and malicious injury to another person or their property are also non-dischargeable.9Office of the Law Revision Counsel. 11 U.S. Code 523 – Exceptions to Discharge
A discharged debt does not automatically clear a judgment lien on the debtor’s property. The debtor has to file a separate motion to avoid the lien. Under federal law, a judicial lien can be removed to the extent it impairs a bankruptcy exemption the debtor would otherwise be entitled to claim.10Office of the Law Revision Counsel. 11 U.S. Code 522 – Exemptions If the total of the judgment lien, other liens, and the exemption amount exceeds the property’s value, the lien can be stripped. Skipping this step leaves the debtor with a discharged debt but a lien still clouding title.
Settlement and Its Tax Trap
Creditors sometimes accept less than the full judgment amount to avoid the cost and delay of enforcement. Debtors should know that the forgiven portion may be taxable income. The IRS treats canceled debt as income reportable in the year of cancellation.11Internal Revenue Service. Topic No. 431 – Canceled Debt, Is It Taxable or Not? If a creditor forgives $30,000 of a $50,000 judgment in exchange for a $20,000 lump sum, the debtor may owe tax on that $30,000.
Debt canceled in a Title 11 bankruptcy case is excluded. Outside bankruptcy, the insolvency exclusion applies when total liabilities exceed the fair market value of all assets immediately before the cancellation, and the excluded amount equals the extent of insolvency. Debtors claiming this exclusion file Form 982 with their tax return.12Internal Revenue Service. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments A debtor whose liabilities were $80,000 and assets were $50,000 at cancellation was insolvent by $30,000 and could exclude up to that amount.
Income and Property the Creditor Cannot Reach
Federal law shields certain income sources from garnishment entirely: Social Security benefits, veterans’ benefits, Supplemental Security Income, and federal employee retirement benefits. When these payments arrive by direct deposit, banks must automatically protect two months’ worth from any garnishment order.3eCFR. 31 CFR Part 212 – Garnishment of Accounts Containing Federal Benefit Payments
State exemptions add another layer. Most states have homestead exemptions that protect some or all equity in a primary residence from judgment creditors, and many offer wildcard exemptions that shield a set dollar amount of any property the debtor chooses. Amounts vary dramatically. Picking the right exemptions can decide whether a debtor keeps essential property or loses it, and a local attorney who knows the state’s exemption rules is often the difference between a manageable outcome and a bad one.