This is a continuation of a blog post regarding Post-Judgment Collections in Massachusetts that was posted on September 3, 2024. This post explains the post-judgment recovery options available for creditors after an Execution is issued.
First, a creditor can record and levy an Execution against real property with the appropriate Registry of Deeds to create a lien on the debtor’s property. The recorded Execution prevents the property from being voluntarily encumbered by the debtor, i.e., re-financed or sold, without satisfying the Judgment unless the Creditor agrees to subrogate its lien position. A lien against the Property in this manner must be brought forward in accordance with M.G.L. c. 236 § 49A every six (6) years after recording to retain and extend the creditor’s lien position against the real property. If the creditor obtained an Attachment during the litigation, the Execution must be levied and recorded within thirty and forty days, respectively, in order for the Execution to retain the lien position preserved by the attachment. M.G.L. c. 223, § 59 and M.G.L. c. 236, § 4.
A standard post-judgment collection option is to file an Application for Supplementary Process in the appropriate District or Municipal Court. After service of the Supplementary Process, the Court will schedule a hearing, which the debtor is required to attend. At the hearing, the Court will ask the debtor to complete a questionnaire detailing the debtor’s finances, including assets and liabilities. The Court will then make a determination as to the Debtor’s ability to pay the debt and issue a payment order, which has the power of any other Court order. If the Debtor fails to make ordered payments, they can be held in contempt of court. However, the Court may find that a debtor lacks the ability to make any payments at all, which limits recovery by the creditor. If the Debtor fails to appear for the hearing, the Court will issue a capias warrant, which can be used to force a debtor to appear in Court.
Additionally, when a creditor can identify a bank, brokerage firm, etc., where the debtor holds personal assets such as an account, then a Complaint for Trustee Process can be filed, naming both the Defendant and the entity holding the Defendant’s funds (Trustee). After the Trustee advises the Court of the amount and type of personal property being held, the Court may allow a specific monetary amount to be released from the debtor’s account(s) to the creditor, subject to statutory exemptions. See, M.G.L. c. 246, § 28A.
Similarly, if a debtor is gainfully employed, a creditor can file an action for a wage garnishment. In this instance, the employer and debtor are both named as defendants. After receipt of an Answer from the employer regarding the debtor’s wages, the Court may issue an Order specifying that a portion of a debtor’s wages be paid directly to the Judgment Creditor. The amount and types of funds that a creditor may be able to recover are limited as described inM.G.L. c. 246, §28.
Finally, domestication is the term used to obtain a judgment on the same debt from another jurisdiction. As an example, if a Judgment creditor has a Massachusetts Judgment and Execution but the debtor owns real property in New Hampshire, collection on the New Hampshire property can only occur if a Judgment is issued by New Hampshire Courts. Generally speaking, if the Judgment obtained in Massachusetts is valid, it is entitled to full faith and credit in other jurisdictions within the United States, and the domesticating jurisdiction can thereafter issue a Judgment and Execution valid in that state to allow for recovery of the debt.
