Federal Judgment Collection in Florida

The federal government collects judgments under a different legal framework than private creditors. The Federal Debt Collection Procedures Act (FDCPA), codified at 28 U.S.C. Chapter 176, gives federal agencies collection tools that are significantly more aggressive than those available under Florida’s state collection laws. These enhanced powers apply to judgments obtained by the FTC, SEC, DOJ, SBA, and other federal agencies in civil enforcement actions.

A Florida debtor facing a federal judgment cannot assume that the same exemptions and procedural protections that apply to private creditor judgments will provide equivalent protection. While state exemptions still apply to most federal civil judgments, the government’s ability to freeze assets before trial, impose liens without recording in state courts, and collect a 10% surcharge on the debt creates a substantially different collection landscape.

The Federal Debt Collection Procedures Act

The FDCPA provides the exclusive civil procedures the United States uses to recover debts and enforce judgments. It supersedes state collection procedures where the two conflict. The Act covers both pre-judgment remedies (Subchapter B) and post-judgment enforcement (Subchapter C), along with its own provisions for exempt property and fraudulent transfers.

Federal agencies that commonly use the FDCPA include the Federal Trade Commission in actions against deceptive business practices and antitrust violations, the Securities and Exchange Commission in enforcement of investment regulations, the Department of Justice in civil fraud actions, and the SBA in loan default collections. Each agency may also have its own enabling statutes that grant additional collection authority beyond what the FDCPA provides.

Pre-Judgment Asset Freezes

One of the most consequential differences between federal and state collection is the government’s ability to freeze a debtor’s assets before obtaining a judgment. Under § 3101, the United States can apply to the court for pre-judgment remedies including attachment, receivership, garnishment, and sequestration of assets.

The government does not need to post a bond for these pre-judgment remedies. Section 3101(c)(3) explicitly exempts the United States from any bond requirement. Under Florida state law, a private creditor seeking a pre-judgment asset freeze must post a substantial bond to compensate the debtor if the creditor ultimately loses the case. The bond cost alone deters most private creditors from pursuing pre-judgment freezes.

The practical effect of a bondless pre-judgment freeze is devastating. A federal agency can file suit and immediately seek to freeze the debtor’s bank accounts, brokerage accounts, and other financial assets. The debtor loses access to funds needed for daily living and legal defense at the moment the case begins, before any finding of liability. Federal agencies routinely use this power, and it often forces early settlements on terms favorable to the government.

Federal Judgment Liens

After obtaining a judgment, the government creates a federal judgment lien by filing a certified copy of the abstract of judgment in the same manner as a federal tax lien under 26 U.S.C. § 6323(f). This is different from the state-court process of recording a judgment in county records. A federal judgment lien attaches to all of the debtor’s real property and takes priority over any lien or encumbrance perfected after the federal lien is filed.

Federal judgment liens last 20 years and are renewable for an additional 20-year period. A debtor with a federal judgment lien is barred from receiving any federal grant, loan, or loan guarantee, including federally insured mortgages, until the judgment is satisfied. This restriction can affect the debtor’s ability to obtain FHA or VA home financing, federal student loans, or government contracts.

Enforcement Remedies

The FDCPA’s post-judgment enforcement tools at § 3202 parallel many state collection remedies but operate under federal procedural rules. The government can use garnishment of bank accounts and wages, levy and execution on personal property, and judicial sale of real property under 28 U.S.C. §§ 2001-2004.

The government is also entitled to a 10% surcharge on the debt under § 3011 to cover the cost of processing and litigating the collection. This surcharge is added automatically and increases the total amount the debtor owes beyond the original judgment, interest, and costs.

Federal agencies can also garnish wages at up to 15% of disposable income through administrative wage garnishment under 31 U.S.C. § 3720D, bypassing Florida’s head of household wage protection. This administrative remedy does not require a court order. The agency sends a garnishment notice directly to the employer after providing the debtor an opportunity for an administrative hearing.

Exemptions Against Federal Civil Judgments

Section 3014 of the FDCPA gives individual debtors the right to claim exemptions, but the process differs from state court. The debtor must elect between two alternatives: the federal bankruptcy exemptions listed in 11 U.S.C. § 522(d), or the debtor’s applicable state and local exemptions. A married couple facing a joint federal judgment must agree on one alternative. They cannot split between the two options.

For Florida debtors, electing state exemptions under § 3014(a)(2) is almost always the better choice. Florida’s unlimited homestead exemption, unlimited IRA and retirement account protection, and generous annuity and life insurance exemptions far exceed the capped dollar amounts in the federal bankruptcy exemption schedule. If the spouses cannot agree on which alternative to elect, the statute defaults to the federal bankruptcy exemptions, a result that is almost always worse for a Florida debtor.

The state exemption election under § 3014(a)(2) includes a 180-day domicile requirement. The debtor must have been domiciled in Florida for the 180 days preceding the government’s filing of its collection remedy. A debtor who recently moved to Florida may not yet qualify for Florida’s exemptions and could be limited to the exemptions of their prior state or the federal bankruptcy exemptions.

Tenants by the Entireties

Section 3014(a)(2)(B) specifically protects tenants by entireties interests against federal civil judgments. The statute exempts any property in which the debtor held a TBE or joint tenancy interest immediately before the government filed its collection application, to the extent the interest is exempt under applicable nonbankruptcy law. Because Florida law broadly protects tenants by the entireties property from the creditors of either spouse individually, married Florida debtors retain this protection against most federal agency judgments.

This protection has limits. The IRS has argued, with some court support, that it can reach a debtor’s interest in entireties property for unpaid federal tax debts. Criminal restitution orders enforced as tax debts under Title 18 may also pierce entireties protection. But for civil judgments by agencies like the FTC or SEC, § 3014(a)(2)(B) expressly preserves the TBE exemption.

Criminal Restitution: The Exception

The most significant exception to Florida’s exemption protections arises when the federal judgment includes criminal restitution under Title 18 of the U.S. Code. Criminal restitution is enforced as a tax debt, which means the government can use the IRS’s lien powers—including placing a lien on the debtor’s homestead and piercing exemptions that would otherwise apply.

A debtor facing criminal restitution cannot rely on Florida’s homestead exemption, tenants by entireties protection, or other state exemptions that would shield assets from a civil federal judgment. This distinction is important because some federal enforcement actions involve both civil penalties and criminal restitution. A debtor may have strong exemption protection against the civil component while having virtually no protection against the criminal restitution component of the same judgment.

Civil restitution awarded under Title 15 (such as FTC consumer protection actions) or other non-criminal federal statutes does not carry the same enhanced enforcement powers. The government’s collection of civil restitution is subject to state exemptions under the standard FDCPA framework.

Federal Fraudulent Transfers

The FDCPA includes its own fraudulent transfer provisions at 28 U.S.C. §§ 3301-3308. The federal statute of limitations for fraudulent transfer actions brought by the government is six years—two years longer than Florida’s four-year limitations period under Chapter 726. The government can challenge transfers made with actual intent to defraud or transfers made for less than reasonably equivalent value while the debtor was insolvent.

The longer federal limitations period means that asset transfers a debtor might consider safe from challenge under state law remain vulnerable to the government for an additional two years. Combined with the government’s pre-judgment remedies, this extended reach makes proactive asset protection planning essential for anyone facing potential federal liability.

Asset Protection Implications

Federal judgment collection operates with tools and timelines that exceed what private creditors can access. The bondless pre-judgment freeze, the 10% surcharge, the 20-year renewable judgment lien with federal program eligibility consequences, and the six-year fraudulent transfer window create a collection environment that is more aggressive than anything available under Florida state law.

Florida’s core exemptions—homestead, retirement accounts, annuities, and tenants by entireties for civil judgments—remain the foundation of asset protection planning against federal debt. But the exemption election requirement, the 180-day domicile condition, and the criminal restitution exception require careful analysis that goes beyond standard state-law asset protection planning.