Civil litigation comes with a lot of built-in quirks most people do not know about. Take monetary awards. Also known as money judgments, they can be domesticated if conditions warrant doing so. But how many people know what domestication is and why a judgment creditor would consider doing it?
Utah’s Judgment Collectors, a specialist collection agency focusing on money judgments, explains that domestication is often the bridge between winning a monetary award and actually collecting it. Domestication comes into play when a debtor moves, debtor assets are found in other jurisdictions, or both.
Domestication Is a Process
Domestication is a legal proceeding. It is also a process. The result is that a judgment entered in one court is also entered in a separate jurisdiction. Entering a judgment makes it official. It is also what gives a judgment creditor the legal authority to collect.
Recording is a simple matter of the court clerk entering records into a computer system and then generating either a paper or digital document. The document is proof that the judgment has been entered. Obtaining the document is absolutely necessary because it establishes the creditor’s legal rights.
Judgment Collectors says that money judgments in the U.S. can be domesticated:
- In another county within the same state
- In another state
- In another country
The rules for domestication differ slightly depending on jurisdiction – at least here in the U.S. Domesticating a judgment in another country could be far more complicated.
Domesticating in Another County
Domesticating a judgment in another county within the same state is the easiest of the three processes. In many states, domestication is not necessary for bank account garnishment. But if a creditor wants to go after wages, real estate, or personal property, domestication is necessary.
The process is simple enough. The creditor or his attorney files the necessary paperwork. In some states, this means a transcript of the original judgment. It gets filed with the court clerk in the domesticating county. In other cases, the only required paperwork is a notice of judgment lien.
Regardless of the required documentation, the county clerk records it and the deed is done. Now the creditor can begin collection efforts in the new county.
Domesticating in Another State
Thanks to the constitution’s Full Faith and Credit Clause, the states are generally required to honor one another’s legal proceedings. Most states adhere to the Uniform Enforcement of Foreign Judgments Act, which provides a fast track means of domesticating judgments. Again, it is usually a simple matter of filing the necessary paperwork with the court clerk.
Domesticating in Another Country
Whether a money judgment can be domesticated in another country depends on whether the target country has an appropriate relationship with the U.S. Countries that have signed on to the 2019 Hague Judgments Convention allow domestication from all countries bound by the treaty. Otherwise, a creditor is looking at a principle known as ‘comity’. Simply put, the creditor needs to sue the debtor in the target country in order to pursue collection efforts.
Why It Is Done
The reason for domesticating also generally answers the question of whether doing so is actually worth it. Creditors domesticate judgments in order to gain access to income and assets that are in a jurisdiction other than the one in which the judgment was first recorded.
A sizable judgment with an award significantly greater than the costs involved in domestication is the perfect candidate. If it would cost a creditor more to pursue domestication than he could reasonably collect, moving forward is not practical.
