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The Basics to Enforcing Business Debt Judgments in Ohio

The Basics to Enforcing Business Debt Judgments in Ohio
June 5, 2016 Shannon Dawes
Small business attorney in Columbus Ohio discusses debt judgement collections in Ohio.

While the process of obtaining a judgment through business litigation can be a daunting and futile ordeal without legal representation, most business owners are probably well aware that the hard part is enforcing a judgment. Once a settlement or trial results in a judgment, the court essentially has virtually no further role in the process. Commercial creditors must take the initiative to pursue the collection of money owed under the judgment. In this blog post, our Columbus small business attorneys provide an overview of basic information for enforcing business judgments.

Although the law varies depending on the jurisdiction, business creditors have a limited period to enforce a judgment. Under Ohio law, a judgment becomes “dormant” five years following the judgment or execution under the judgment. After the judgment becomes dormant, the lien upon the estate of the judgment debtor is lifted. The judgment can be revived within ten years of its falling into dormant status. In other words, a judgment can be enforced for fifteen years after its entry if the judgment creditor follows proper procedures. However, nearly three in four judgments expire without being enforced because many businesses proceed without a business lawyer who has expertise in judgment enforcement.

There are several debt enforcement tools that our law firm might use to collect the money owed to your business:

Writ of Execution: Whether we use skip trace services, judgment debtor examinations, or asset search software, our law firm works to uncover bank accounts and other sources of cash that the debtor might be diverting or hiding. While the legal process can be complicated, our law firm might file a Writ of Execution which can be served on the debtor’s bank to retrieve money deposited into financial institutions. In some cases, we might even be able to obtain a Writ or Execution that permits a law enforcement official to seize cash at the business establishment of the debtor.

Filing Liens on Real Property: A lien essentially places a legal claim on property that constitutes a cloud on title in the debtor’s county. Our law firm will perfect the lien with the county recorder, which generally will have to be resolved before the property can be sold or refinanced. If a judgment lien is in place, you will receive the amount owed to you from the proceeds of the sale or refinanced loan.

Wage Garnishment: Depending on the circumstances, an officer or owner of the business that owes a debt can be held personally liable for the financial obligation. Garnishments can be a powerful tool that results in funds being deducted from paychecks by the payroll department of the business before the individual subject to the garnishment receives his or her net pay.

Under Ohio law, commercial collections are not subject to consumer protection laws like the Fair Debt Collection Practices Act (FDCPA) which means more aggressive collection practices can be employed to recover funds on commercial debts. Further, businesses are held more strictly to the terms of contracts when courts interpret the terms of the agreement. Provisions in a contract relating to issues like late fees, summary rights of execution, acceleration of balances due, variable interest rates typically will be enforceable in a commercial context. When our law firm pursues collection of a commercial debt, we also might employ specific tools that cannot be used to enforce consumer debts, such as creditor bills, equipment levies, receiverships, and successor liability.

If you have questions about commercial collection or other contract issues, we welcome the opportunity to talk to you and answer your questions. We invite you to call Dawes Legal, LLC at 614-733-9999 or submit an inquiry form through this website to schedule your initial consultation.