When you litigate a dispute and win, you may believe that the difficult part is over. The civil procedure for collecting a judgment in Nevada is complex and legally nuanced, especially when handling enforcement efforts in business proceedings. In some cases, obtaining the judgment you are owed can be just as challenging as winning a commercial lawsuit.
At Hone Law, we have spent decades advising companies ranging from large corporations to one-owner organizations on how to effectively collect judgment after a business or commercial lawsuit. Our team of experienced attorneys will review your situation and strategize an approach that ensures the most successful collection efforts possible. To discuss how we can represent you, consider connecting with us at (702) 608-3720 today.
What Is the Process for Collecting a Judgment in Nevada?
At the end of a civil case, the final decision awarding compensation to the winning party is called a judgment (NRCP Rule 54). If your company wins the business or commercial lawsuit, it is considered the judgment creditor. The losing party becomes the judgment debtor. Typically, the debtor will be required to pay the judgment as a one-time lump sum, but a debtor will sometimes ask to pay in installments. Judgments are typically recorded with the county clerk, who may assist with collection efforts.
After the judgment is issued, the debtor may be required to disclose their assets. Your business attorney will work with you to investigate these assets and identify any transferred property that may have been hidden by the debtor. Not all assets are subject to collection efforts and under Nevada law, some forms of income and property cannot be taken to pay a judgment.
For How Long Are Judgments Enforceable?
There is a deadline for judgment debtors to make good on compensation owed to your company. Unfortunately, collecting a judgment can quickly become as difficult as winning the lawsuit, and many debtors disregard the financial obligation until the creditor forces collection. Based on NRS § 11.190(1)(a), judgments in Nevada are enforceable for six years. This means that if the judgment is not collected within six years from the date it was entered, then the ability to collect the judgment expires.
Under Nevada law, judgments can be renewed. If completed successfully, a renewal will extend the period of enforcement for another six years. There are several strict regulations concerning enforcement renewals, and a minor misstep during the process can prevent you from renewing the judgment. The statute requires judgment creditors to begin the renewal process within 90 days of the judgment’s expiration date.
Who Is Responsible for Collecting Judgment?
It is the responsibility of your company, the judgment creditor, to collect the civil judgment it won in the lawsuit. While the court may assist with collection efforts, it is not the court’s duty to collect the judgment on your behalf. This means that if the debtor fails to pay the judgment voluntarily, your company must take the legal steps necessary to collect the judgment.
Can My Company Force the Losing Party to Pay a Judgment?
Yes, there are options available to your company for collecting a judgment in Nevada. If the judgment debtor refuses to pay the judgment, your attorney may pursue these options to seek relief:
- Place a real property lien on the debtor’s home. Nevada law allows a judgment debtor to exempt up to $550,000 of equity in their home, but if possible, your company may force a foreclosure of the real property by following certain legal procedures.
- Garnish the bank accounts and wages of the debtor. Your company may be able to collect a portion of the debtor’s wages or attach money to a bank account. Nevada law limits the amount of money that can be garnished from wages to 25% of the debtor’s income after taxes.
- Seize the debtor’s personal property to be sold by the county sheriff’s office. There are a range of compliance challenges associated with the seizure of personal property, so consult an attorney who is familiar with collection methods and the court policies used to identify and seize assets.
Is the Losing Party’s Property Protected?
Your company cannot take certain property related to the judgment debtor’s basic needs. Both state and federal laws ensure that a judgment debtor can preserve their home and employment by placing protections on certain types of property or equity in an asset. This can complicate the process of collecting a judgment in Nevada.
For instance, most of their personal property such as furniture, clothing, and household appliances cannot be taken to pay a judgment. They are also entitled to some equity in retirement accounts and other valuable assets. Some states, including Nevada, protect some equity in the debtor’s homestead and their motor vehicle. Your attorney can explain exempt property under Nevada law.
What Happens If the Losing Party Files for Bankruptcy?
If the losing party files for bankruptcy, it is possible that their judgment debt will be discharged. Bankruptcy does not remove liens placed on property, however, meaning your company can still take the encumbered property. In some cases, your attorney can file an adversary proceeding to contest the bankruptcy or to ask the court to prevent judgment from discharge.
How Can Hone Law Help Your Company Successfully Collect Judgment in Nevada?
Obtaining judgment is not the end of your litigation journey. Your company must still collect the debt it is owed, but when the courts have little authority to compel payment, what is the right path forward? While collecting a judgment can be challenging, with the right approach it is entirely possible.
At Hone Law, we help companies identify debtors’ assets, enforce judgment debts, and explore other legal options when necessary. With our team of experienced attorneys in your corner, you can navigate this complex process with confidence and ease. For more insight into collecting a judgment in Nevada, consider contacting us at (702) 608-3720 today.