What Happens If a Defendant Does Not Pay a Judgment?

Summary

If a defendant does not pay a judgment, the creditor must enforce the judgment through legal means. The court will not automatically collect the money on the creditor’s behalf.

The defendant will not be sent to jail for failing to pay a civil judgment, but the creditor can use various civil enforcement tools (such as garnishing wages, seizing funds from bank accounts, placing liens on property, or having a sheriff levy and sell non-exempt assets) to satisfy the judgment.

State laws also protect certain income and property from creditors, such as a primary home or retirement accounts, which can limit what a creditor can seize. If a debtor’s assets are largely exempt or difficult to reach, creditors often negotiate a settlement for less than the full amount to resolve the judgment.

Can a Defendant Go to Jail for Not Paying a Judgment?

No. Defendants cannot be sent to jail for failing to pay a civil money judgment. In the United States, “debtors’ prisons” are a thing of the past; the legal system does not allow imprisonment simply for unpaid civil debts like contract damages or personal injury awards.

An unpaid judgment is a civil matter, and the consequences are financial, not criminal.

There are narrow exceptions where jail can result from nonpayment, but those involve violating specific court orders rather than just owing money. For example, willfully failing to pay court-ordered child support or criminal fines can lead to contempt of court proceedings and potential incarceration.

However, these situations are different from an ordinary civil judgment. Courts also distinguish between a debtor’s inability to pay and willful refusal to obey a court order. Only intentional disobedience (in limited contexts, like ignoring a court’s order to pay support or hiding assets in defiance of a court directive) might result in jail time.

In short, owing money on a civil judgment, by itself, will not put a defendant in jail. The creditor must use civil collection remedies instead.

Methods to Enforce a Judgment

When a defendant does not pay voluntarily, the judgment creditor has several legal tools to enforce the judgment. These methods vary by state but generally include:

• Wage Garnishment: A court can order the debtor’s employer to withhold a portion of the debtor’s paycheck to go toward the judgment debt. Federal law and state laws limit the amount of a paycheck that can be garnished, but if permitted, typically around 25% of disposable earnings can be taken (unless the debtor qualifies for a specific exemption).
• Bank Account Garnishment: The creditor may obtain a writ of garnishment to seize funds directly from the debtor’s bank accounts. The bank is ordered to freeze the account and divert money to the creditor, up to the amount of the judgment, subject to any applicable exemptions (for example, some states protect a certain amount of cash or wages deposited in bank accounts).
• Liens on Property: A judgment creditor can record a lien against the debtor’s real estate or other property. The lien encumbers the property, preventing the debtor from selling or refinancing it without paying the judgment. In many states, a judgment lien can attach to homes, land, vehicles, or other valuable assets that the debtor owns.
• Levy and Sale of Property: Under court supervision, a creditor can have the sheriff levy (seize) the debtor’s non-exempt property and sell it at a public auction to satisfy the judgment. This can include personal property, business equipment, vehicles, or even real estate, depending on the state’s laws and the specific assets that are not protected by exemptions. The proceeds of the sale are applied to the judgment balance.
• Post-Judgment Discovery (Proceedings Supplementary): If the creditor is unsure what assets the debtor has, they can use legal procedures to force the debtor to disclose assets and financial information. In Florida, for example, creditors can initiate proceedings supplementary to investigate whether the debtor has hidden assets or has fraudulently transferred assets to others. Likewise, many states allow creditors to subpoena financial records, depose the debtor under oath, or require the debtor to answer written interrogatories about their assets. These discovery tools help locate any property or income that could be used to satisfy the judgment.

State laws provide exemptions that protect certain property and income from these collection efforts. In other words, a creditor cannot take everything a debtor owns.

Common examples include homestead exemptions (protecting some or all equity in a primary residence), exemptions for retirement accounts, and limits on wage garnishment or public benefits. The exact scope of these protections varies widely by state.

Consequences in Florida if a Defendant Does Not Pay a Judgment

Florida has debtor-friendly asset protection laws. If a defendant in Florida does not pay a civil judgment, there are no criminal penalties. It remains a civil matter, and the creditor must use civil collection methods to recover the debt.

Florida law makes judgment collection more challenging for creditors by shielding many types of the debtor’s property from execution or garnishment. Key Florida asset protections include:

• Homestead Real Estate: A Florida resident’s primary home is generally off-limits to most creditors. Florida’s homestead exemption can protect a residence with unlimited monetary value (up to 1/2 acre in a municipality or 160 acres in the county) from forced sale by a judgment creditor.
• Wages of a Head of Household: In Florida, if the debtor is the head of a household (providing more than half of support for a dependent), their earnings are exempt from garnishment (net wages up to $750/week are fully protected, and even above that amount if the debtor has not agreed in writing to a garnishment). This means many Florida debtors’ paychecks cannot be touched by creditors, a protection not available in most other states.
• Retirement Accounts (401(k)s and IRAs): Tax-deferred retirement accounts such as 401(k) plans, pensions, and IRAs are protected from creditors under Florida law. The full value of these accounts is typically exempt, recognizing that these funds are meant for the debtor’s future support.
• Life Insurance Cash Value: The cash surrender value of life insurance policies owned by the debtor (on their own life) is exempt from creditors in Florida. This allows debtors to preserve life insurance savings from judgment collection.
• Annuities: Proceeds and even the streams of payments from annuity contracts are protected under Florida statutes. Even after a payment is received from an annuity or life insurance, if it can be traced, it remains exempt when deposited into a bank account in Florida, as long as those funds are identifiable as coming from an exempt source.

These Florida exemptions mean that a judgment debtor in Florida can often keep their home, essential wages, retirement funds, and certain insurance monies out of creditors’ reach.

As a result, if a Florida debtor’s assets are largely exempt, the creditor may have a hard time finding anything to collect.

Florida judgment creditors frequently resort to post-judgment discovery tools to locate any non-exempt assets. They can require the debtor to disclose financial accounts, property, and transfers.

If the creditor discovers non-exempt assets, they can then pursue the garnishments, liens, or levies. But if the debtor mostly has only exempt assets, the creditor’s judgment might go unpaid unless the debtor later acquires collectible assets or agrees to a settlement

Settling a Judgment After Nonpayment

Given the difficulties and costs of chasing an unpaid judgment, it’s very common for creditors and debtors to negotiate a settlement.

For example, a creditor might agree to accept a lesser lump-sum amount (or a payment plan) in exchange for giving up on trying to collect the full judgment balance. Creditors consider this when the debtor’s non-exempt assets are insufficient or hard to reach. A reduced payment now may be better than an uncertain amount later after expensive legal efforts.

A settlement can take various forms. Often, it involves the debtor paying an agreed amount either all at once or in installments over time.

Once the debtor fulfills their end of the bargain, the creditor will file a Satisfaction of Judgment in the court records. This is an important step that officially marks the judgment as paid, clearing it from the debtor’s record and ensuring the creditor cannot pursue further collection on that judgment.

From the debtor’s perspective, obtaining a recorded satisfaction of judgment is crucial to clear liens on property title and to repair credit history.

Settling a judgment is often a practical choice when a stalemate occurs: the debtor’s key assets might be protected by law or otherwise unavailable, and the creditor realizes that aggressively chasing the debt may yield little result.

Debtors with primarily exempt assets (like those protected homestead or retirement funds in Florida) have more negotiating power because creditors cannot seize those assets.

On the other hand, creditors weigh the time and expense of continued collection litigation against the benefit of a guaranteed partial recovery. Ultimately, both sides may find it prudent to avoid protracted post-judgment battles.

A well-negotiated settlement allows the creditor to recover something and lets the debtor move on and avoid more drastic collection measures.

Debtors have exempt assets that are difficult to reach, and creditors face practical barriers to enforcement. Each party must weigh the risks and benefits of continuing litigation versus resolving the debt.