The Florida courts often opt recognize the validity of a judgment issued in another jurisdiction. Domestication is the legal process that allows a creditor with a judgment from one state to enforce that judgment elsewhere.
The process of domesticating a foreign judgment is typically faster and more cost-effective than pursuing a second lawsuit against the same debtor. However, there are still costs involved in the process. In some cases, creditors make the effort to domesticate a judgment, only to find themselves still unable to collect on the outstanding balance due.
Once creditors have tracked a debtor subject to a judgment in another jurisdiction to Florida, they may need to partner with a lawyer familiar with debt collection and domestication in Florida to protect themselves. Specifically, they may need support investigating the debtor’s assets and financial circumstances to validate that domestication is worth pursuing.
Not all judgments are actually enforceable
Numerous state and federal laws restrict the debt collection process. Creditors who have a judgment against a debtor are in one of the strongest possible positions for collecting on that debt. Some debtors are effectively judgment-proof, meaning that even a court order is unlikely to result in the recovery of the funds owed.
What does it mean to be judgment-proof?
A judgment-proof debtor is an individual in a situation that renders a judgment all but unenforceable. Perhaps they currently have no taxable income, meaning they have no wages to garnish. Maybe they have minimal income, but they are the head of a household, making garnishment all but impossible.
Other times, assets that appear to be vulnerable to a judgment might not actually help creditors. The vehicle that a debtor drives could be a leased vehicle that the debtor does not actually own, for example.
Creditors with existing judgments who want to domesticate an out-of-state judgment in Florida may need help investigating the debtor and their circumstances. In some cases, the creditor might lose more money in the legal process than they gain by domesticating the judgment.
Reviewing a judgment and a debtor’s circumstances with a skilled legal team can help creditors evaluate their options. While domesticating a judgment can often be a smart move, creditors need to check the situation carefully to ensure that any investment they make in the legal process is likely to result in a positive financial impact for a particular company.
