Old Judgments Can Take You By Surprise
Judgments never go away. There is a 20 year statute of limitations for enforcement of judgments. Old judgments can come back to bite you. Take, for instance, the experience of a debtor who called me earlier this week who had a judgment entered against him in California in 1995. The debtor currently lives in Florida. She had heard nothing from the judgment creditor since 1995. Without warning, a couple week ago she found that writs of garnishment had been placed on all of her several bank accounts and brokerage accounts. All financial accounts were owned with her husband as tenants by entireties and were exempt.
The debtor told me that many of her outstanding checks bounced. She had to go to court to get the garnishment dissolved on the basis that the accounts were all exempt entireties accounts. She incurred legal fees and great inconvenience. If the creditor had any reason to know that the financial accounts were exempt joint accounts the debtor may have a cause of action against the creditor for wrongful garnishment.
It is unlikely that the original creditor is the party trying to execute on this judgment. Most creditors let judgments lie on the public record after their initial collection efforts. What may have happened in this instance is that the original judgment was sold to a third party investor, probably a collection company. There are companies that pay pennies on the dollar for old judgments in hope of making money by a surprise attack on a complacent debtor. The lesson is that people must maintain effective asset protection plans long after a judgment is entered against them. Asset protection must remain up to date and correctly implemented. Don't relax just because your asset protection has effectively defended initial creditor attacks because you do not know when the next collection attack will come.
I found after much research on the Florida Statute on Wage Garnishment that the 20 year limit is not ture all on jugements.
CIVIL PRACTICE AND PROCEDURE Chapter 55
JUDGMENTS View Entire Chapter
55.10 Judgments, orders, and decrees; lien of all, generally; extension of liens; transfer of liens to other security.--
(1) A judgment, order, or decree becomes a lien on real property in any county when a certified copy of it is recorded in the official records or judgment lien record of the county, whichever is maintained at the time of recordation, provided that the judgment, order, or decree contains the address of the person who has a lien as a result of such judgment, order, or decree or a separate affidavit is recorded simultaneously with the judgment, order, or decree stating the address of the person who has a lien as a result of such judgment, order, or decree. A judgment, order, or decree does not become a lien on real property unless the address of the person who has a lien as a result of such judgment, order, or decree is contained in the judgment, order, or decree or an affidavit with such address is simultaneously recorded with the judgment, order, or decree. If the certified copy was first recorded in a county in accordance with this subsection between July 1, 1987, and June 30, 1994, then the judgment, order, or decree shall be a lien in that county for an initial period of 7 years from the date of the recording. If the certified copy is first recorded in accordance with this subsection on or after July 1, 1994, then the judgment, order, or decree shall be a lien in that county for an initial period of 10 years from the date of the recording.
(2) The lien provided for in subsection (1) or an extension of that lien as provided by this subsection may be extended for an additional period of 10 years, subject to the limitation in subsection (3), by rerecording a certified copy of the judgment, order, or decree prior to the expiration of the lien or the expiration of the extended lien and by simultaneously recording an affidavit with the current address of the person who has a lien as a result of the judgment, order, or decree. The extension shall be effective from the date the certified copy of the judgment, order, or decree is rerecorded. The lien or extended lien will not be extended unless the affidavit with the current address is simultaneously recorded.
(3) In no event shall the lien upon real property created by this section be extended beyond the period provided for in s. 55.081 or beyond the point at which the lien is satisfied, whichever occurs first.
CIVIL PRACTICE AND PROCEDURE Chapter 55
JUDGMENTS View Entire Chapter
55.10 Judgments, orders, and decrees; lien of all, generally; extension of liens; transfer of liens to other security.--
(1) A judgment, order, or decree becomes a lien on real property in any county when a certified copy of it is recorded in the official records or judgment lien record of the county, whichever is maintained at the time of recordation, provided that the judgment, order, or decree contains the address of the person who has a lien as a result of such judgment, order, or decree or a separate affidavit is recorded simultaneously with the judgment, order, or decree stating the address of the person who has a lien as a result of such judgment, order, or decree. A judgment, order, or decree does not become a lien on real property unless the address of the person who has a lien as a result of such judgment, order, or decree is contained in the judgment, order, or decree or an affidavit with such address is simultaneously recorded with the judgment, order, or decree. If the certified copy was first recorded in a county in accordance with this subsection between July 1, 1987, and June 30, 1994, then the judgment, order, or decree shall be a lien in that county for an initial period of 7 years from the date of the recording. If the certified copy is first recorded in accordance with this subsection on or after July 1, 1994, then the judgment, order, or decree shall be a lien in that county for an initial period of 10 years from the date of the recording.
(2) The lien provided for in subsection (1) or an extension of that lien as provided by this subsection may be extended for an additional period of 10 years, subject to the limitation in subsection (3), by rerecording a certified copy of the judgment, order, or decree prior to the expiration of the lien or the expiration of the extended lien and by simultaneously recording an affidavit with the current address of the person who has a lien as a result of the judgment, order, or decree. The extension shall be effective from the date the certified copy of the judgment, order, or decree is rerecorded. The lien or extended lien will not be extended unless the affidavit with the current address is simultaneously recorded.
(3) In no event shall the lien upon real property created by this section be extended beyond the period provided for in s. 55.081 or beyond the point at which the lien is satisfied, whichever occurs first.