You can stop a creditor’s “execution” on a judgment by paying it off, making payment arrangements, or filing bankruptcy.
“Execution” is the process by which an official, usually a county sheriff’s deputy, is directed to seize and sell your real estate and/or personal property for the purpose of paying a court judgment against you.
To understand “execution,” it is crucial to understand what a judgment is. In the context of debts, a judgment is simply a court determination that you legally owe a debt. It establishes the amount of debt owed, plus related terms such as the ongoing interest rate, and any costs and fees also owed.
Except in very unusual situations, a creditor cannot “execute” on your property until it gets a judgment. But it’s usually all too easy for a judgment to be entered against you. You get served with papers saying that you are being sued, you don’t have the money to pay the debt, and you know you owe the debt so you don’t see any point in responding to dispute it. As a result when you don’t officially respond by the short deadline stated on the papers, a judgment is entered against you. You may very well not know that it has happened. And you very likely don’t realize that because of that judgment the creditor has an immediate right to “execute” on what you own in order to get that judgment paid.
How “Execution” Works
In Oregon, a creditor with a judgment against you is entitled to have a court issue a Writ of Execution any time after the entry of a judgment.
The Writ of Execution is a document which directs the county sheriff to take control over and sell:
1) “real estate of the judgment debtor”
2) “personal property of the judgment debtor in the possession of the judgment debtor”
3) “currency that is in the possession of the judgment debtor”
and deliver the proceeds to the court for application against amounts owing on the [judgment]. See Oregon Revised Statutes 18.860.
In other words, by just filling out the appropriate form, any creditor which gets a judgment against you—which they can usually get in a matter of a month or so—can get an order requiring the sheriff to seize your real estate, your personal property, and your cash, to pay a debt.
“Executions” Are Not as Common as You’d Think
We don’t want to mislead you into thinking that any creditor which gets a judgment is going to immediately start executing on your property.
There are many reasons why it doesn’t happen all the time. For most people, much of what they own is protected through property exemptions—categories and amounts of property that are protected from their creditors. Creditors often don’t know what you own, and so don’t want to pay an attorney to go through procedures that will cost them money and not put any money into their pocket. And often there are easier ways of getting paid on a judgment, such as garnishing your paycheck or bank accounts.
But Still, Avoid the Risks of an “Execution”
Nevertheless, having a sheriff’s deputy show up at your door with orders to take all your cash and personal property that is not exempt, and to sell your home if it has sufficient equity, would not make for a good day.
The Bankruptcy Option
Assuming you don’t have the money to pay off a judgment, even in installment payments, as soon as you get sued by a creditor you would be wise to meet with a competent bankruptcy attorney to find out your options.
Be aware that if any of the bankruptcy options (generally Chapter 7 or Chapter 13 for consumers) are appropriate for you, the filing of your bankruptcy case will stop any “execution” that is in process. If a judgment was entered but no Writ of Execution has been sent yet by the creditor to the court, your bankruptcy filing will prevent the creditor from taking that step. If you’ve been sued but your bankruptcy is filed before a judgment is entered, the creditor can’t have that judgment entered. And finally, if your bankruptcy is filed before the creditor sues you, except in unusual circumstances, it can never sue you, which avoids the risk of “execution” altogether.