You went to court and got a judgment that says you're entitled to money from the party you sued, now called a "judgment debtor." What comes next? How can you—the judgment creditor—collect the money you're due? That's the focus of this article.
One way to collect is by putting judgment liens on the judgment debtor's Hawaii property. After a quick review of how judgment liens differ from judgments, we'll turn our attention to the specifics of Hawaii law. In particular, we cover:
If you want some background information, here's more about how court judgments are collected.
A judgment is a court order that says a judgment creditor is legally entitled to a sum of money from a judgment debtor. But a judgment, standing alone, isn't self-enforcing. That is, you can't take a judgment to your county sheriff's office and demand that the judgment debtor's real estate be sold to pay you.
If you want to seize and sell the judgment debtor's property, you first have to attach your judgment to specific items of property. That's what a judgment lien does. As we discuss later, when a certified copy of your judgment is recorded with the Hawaii Bureau of Conveyances, it becomes a lien against the judgment debtor's nonexempt real estate statewide. Once that's done, you can look for ways to turn your judgment into cold, hard cash.
In Hawaii, you can attach judgment liens only to real estate, meaning land, houses, buildings, and other improvements. A properly recorded judgment attaches a lien to real estate the judgment debtor:
You can't put judgment liens on Hawaii personal property—cars, artwork, antiques, electronics, household furnishings, and the like. But that doesn't mean a judgment debtor always gets to keep their autos, boats, and other big ticket items. Even without judgment liens, there's a way to have the sheriff seize personal property.
If you're considering this step, speak to a Hawaii collection lawyer first. They can tell you whether it's worth your time and expense to go after the judgment debtor's personal property—and there's a good chance it won't be. If it's likely to be worthwhile, they'll guide you through the process.
Like all states, Hawaii exempts some property—both real and personal—from the reach of creditors. Unless stated otherwise, dollar amounts mentioned here represent the maximum value of the debtor's exempt equity in the property, which might not be the same as the property's market value. In addition, some exemptions are subject to exceptions.
Here are a few examples.
Hawaii has a convenient statewide real estate judgment lien recording system. To attach a judgment lien to real estate situated anywhere in Hawaii, simply follow these steps.
Once recorded, your judgment creates a lien on all the judgment debtor's Hawaii real estate.
As a general rule, a Hawaii judgment lien expires when the underlying judgment expires. Below, we discuss how to extend a Hawaii judgment and the impact that has on your judgment liens.
Unless it's extended, a Hawaii judgment expires ten years from the date it was entered. Once it expires, your judgment is legally dead. Nothing you do will bring it back to life. You can't take any additional steps to collect it. In short, you've lost the right to the money you were owed.
Before your Hawaii judgment expires, you can extend it by filing a motion for extension with the court where the judgment originally was entered. Ask the court to extend it for another ten year term. Note that the maximum life of a Hawaii judgment is 20 years from the date it was first entered.
When you file your motion, you must notify the judgment debtor by serving them with a copy. If the judgment debtor doesn't oppose your motion, the court will grant it. But if they contest the extension, the court will hold a hearing. Should that happen, you'll want to be represented by experienced legal counsel.
Because Hawaii judgment liens are good for the life of the underlying judgment, Hawaii law doesn't mandate that you take any additional steps to renew your liens once you've extended the judgment. Judgment liens should remain in place and retain their spot in line for payment.
But some title companies prefer that you take the extra step of recording the order extending your judgment with the Bureau of Conveyances. This assures there won't be any confusion about whether your judgment remains in effect or your liens are in place.
If you have questions or aren't sure what to do, get advice from an experienced Hawaii collections attorney.
In general, there are three ways you can try to collect on a Hawaii judgment lien:
If you want payment sooner rather than later, this is likely your best choice. No, you won't get all the money you're entitled to, but that's the nature of a settlement. You'll collect faster—and more inexpensively—than via the other two options.
Most often, a buyer or lender will insist on clear title, free of all judgment liens. To sell or refinance, the judgment debtor will have to approach you to make a deal. Only now, you've got more negotiating leverage. As long as you're willing to sit tight and wait, this too is a low-cost, low-stress way to collect.
Executing on your lien means having the sheriff sell the judgment debtor's property at auction. This might seem like a tempting option. But before you head down this path, check with a local attorney to find out about the legwork and costs involved. In addition, see who's ahead of you in payment priority, or you might discover—too late—that the sale proceeds aren't enough to pay you in full (or at all).
Lastly, be aware that this step might be just the push the judgment debtor needs to declare bankruptcy. Should that happen, you're likely to be standing in a long, very unhappy line of creditors with little chance of getting paid.
We've covered Hawaii judgment lien basics, but of course, the devil's in the details. Now that you're familiar with Hawaii law, you might decide that your best option is to get help collecting your judgment. An experienced Hawaii creditor's rights or collection attorney can answer your questions and help you chart a collection path that gives you the best chance to maximize your recovery.