A money judgment is a civil court judgment through which financial payment remediates the issue at hand. It is the most common type of judgment in cases involving small businesses, individuals, etc. And believe it or not, money judgments can be renewed in most states.
Renewal is an option because money judgments do not last forever. They expire thanks to statutes of limitation. Though there are some exceptions, most statutes of limitation on money judgments run 7-10 years. If a judgment creditor has not succeeded in collecting when the original term is close to expiring, renewing allows the creditor to continue collection efforts beyond the original term.
With all of that said, here are five important things to know about money judgment renewal:
1. Application Must Be Made Beforehand
The most important thing, according to Judgment Collectors out of Salt Lake City, UT, is that a renewal application needs to be filed before the judgment expires. Otherwise, judgment collection efforts must cease on the expiration date.
Let’s say you have a Utah money judgment set to expire on September 30. You would have to file your renewal application no later than the 29th. It is better not to wait that long. Why? Because if the court does not get to your application prior to the original judgment’s expiration, you may have to pause collection efforts temporarily. Filing well in advance mitigates that problem.
2. Renewal Periods Can Be Different
A general rule is that renewal terms are identical in length to a judgment’s original terms. So if the original judgment was good for 7 years, the renewal is probably good for another 7 years. But there are exceptions.
A small number of states grant renewals for just 5 years – even when the original judgments had terms of 7-10 years. There are also some states that only allow one renewal. Most states allow indefinite renewals.
3. A Hearing Probably Won’t Be Necessary
Although applying to renew a judgment means engaging with the court system yet again, the good news is that a hearing probably won’t be necessary. As long as a creditor’s application is filed on time, approving the application is an administrative task that can be completed fairly easily by the county clerk.
As with all things in civil litigation, there are exceptions to the rule. Additional hearings are necessary in very rare cases. Even so, the hearings tend to be more formal affairs than anything else. It is not often that an application to renew gets denied.
4. Renewal Only Applies to the Judgment
Judgment creditors should be aware that renewing a judgment applies only to the actual judgment itself. If a creditor filed liens against debtor property, those liens are considered separate under the law. They need to be renewed separately.
This dictates filing separate abstracts of judgment or personal property liens following judgment renewal. Doing so is more administrative than anything else, but it’s still necessary.
5. Debtors Have to Be Informed
Finally, debtors need to be informed in most states. Just like debtors were served with a summons when they were first sued, they also need to be served notice that an application for renewal has been filed. This is normally done by sending a copy of the court motion to the debtor’s last known address.
Most states allow judgment renewal prior to original expiration. This is helpful in the sense that renewing gives judgment creditors more time to collect. How much more time depends on state laws. If you have an outstanding judgment nearing expiration, this is something you might want to look into.
