Following successful judgment against a defaulting debtor, creditors will usually ask a court for a creditor’s hearing, in which the debtor must make a sworn declaration of all assets and property. This may be done in writing or by oral deposition. Exempted property (that which cannot be seized in satisfaction of a judgment) includes a primary residence up to a certain value, vehicles not used for employment, tools used for employment, some personal effects and household goods, and life insurance/retirement proceeds. However, funds in bank accounts, extra vehicles, boats, campers, and other items of value (musical instruments, stocks and bonds) are subject.
Judgment creditors generally do not come upon a debtor’s property and seize items. Instead, they present a copy of their court judgment, along with a “writ of execution” form, to local law enforcement officials (sheriff, marshal, constable) who will “execute” the writ and seize property.
A judgment creditors may also request that the court issue of writ for garnishment of the debtor’s wages. If granted, the court order for garnishment is served directly upon the debtor’s employer, who must comply with its terms. Generally, up to 25 percent of wages can be garnished from a judgment debtor’s wages. The garnished amount is paid directly to the judgment creditor by the debtor’s employer.
Seized property may be sold at public auction, with proceeds returned to the judgment creditor. Most states permit “redemption” (repurchase by the debtor) of real property (real estate) sold at auction, within a specified time, e.g., one year. Money received at auction which is in excess of the debt owed is returned to the debtor.