Once a creditor wins a lawsuit against (by default or otherwise) the creditor can now "execute" on the judgment and take other actions against you. Judgments are good for 10 years in Missouri, and can be renewed every 10 years by the creditor. Here are the 3 primary ways that the creditor will attempt to forceably collect their money from you:
A. Wage garnishment-This most common form of garnishment takes place when the creditor files garnishment forms with the Court. The creditor lists your employer and information about the judgment and the sheriff serves it on your employer and will require your employer to withhold 25% of your gross pay each payday. If you are head of household (live with a minor child) you can fill out a form with your employer letting them know and then the garnishment will be reduced to 10% of your gross pay every payday.
B. Bank Garnishment-If the creditor knows where you are banking (if you have ever mailed them a check for payment from your current bank) the creditor will send the sheriff out with a request for the bank to send the creditor any funds in ANY account you have at that account. Generally, the bank is required to send the funds from your account that accrues in the next 30 days and send the money to the creditor's attorney at the end of the 30 day period. Helpful hint: If you work fast, you can go to the Sheriff in the county where the BANK is and claim exemptions. As of the time of this publication, the "wildcard" exemption will help you keep $600 of the funds that were in the bank, and the head of household exemption will allow you to keep $1,250 plus $350 for each minor child in the household. These, of course, are Missouri exemptions, and if you live in some other state, you will have to check your states exemptions. All you have to do is go to the sheriff and let them know your bank account is being garnished and that you want to claim your exemptions. Be sure to take along a few dollars cash to pay their notary.
C. Lien on real property-A creditor holding a judgment against you can register the judgment as a lien against any property you have in that County. In fact, they can file a lien against property anywhere, including in other states, but the Creditor would have to register a "foreign judgment" in that state first. The Lien will remain against the property until you transfer the property. At that time, you will have to "settle up" and get the creditor paid in order to transfer property free and clear of the lien.
As a side note, the creditor holding a judgment can ask the Court to bring you into Court to endure a "Debtor exam." The creditor will ask you under oath for information about your real estate, your job, where you bank etc. in order to effectively execute their judgment. Some debtors have been successful in "claiming the 5th amendment" and been allowed not to answer the questions.
