Can Judgments from One State Be Collected in Another?

A popular tactic utilized by individuals and companies looking to avoid paying outstanding judgments is to pick up and move to another state. It used to be that relocating across state lines was an effective way to make yourself judgment proof. But that is no more. Under the Uniform Enforcement of Foreign Judgments Act (UEFJA) created a number of years ago, it’s possible to collect judgments in states to where debtors have fled to avoid paying.

The UEFJA was created specifically to fight the practice of crossing state lines to skip out on legitimate debts. The Act, while not exactly the same as legal reciprocity, gives individual states the legal authority to domesticate judgments entered in other states for the purposes of allowing creditors to collect. In order for this to work though, the domesticating state needs to voluntarily participate in the Act.

The good news is that most states do participate in the UEFJA. At this point in time, only a small handful do not. But even at that, if an original lawsuit were registered in a federal court, there is still a way to domesticate the suit in a state that does not participate.

What It Means to Domesticate

Domesticating a civil judgment isn’t a complicated principle. Domestication is simply legal recognition by a court that a judgment rendered in another state is valid and, therefore, enforceable within that court’s jurisdiction. It is essentially a county court giving creditors from another state authority to enforce a judgment locally.

There are some conditions that need to be met, though. The most important is that the debtor must have some material connection to the county in which domestication is sought. Judgment Collectors, a Salt Lake City firm that specializes in collecting judgments, explains that a connection is easy enough to make. A debtor has a material connection to that jurisdiction if they:

• Live in the jurisdiction
• works full time in the jurisdiction
• owns assets located in the jurisdiction.

As long as a connection can be demonstrated, domestication is usually a straightforward process. The creditor’s attorney files the correct paperwork with the local court. The court reviews the paperwork and, if satisfied, domesticates the judgment. The creditor can now initiate collection efforts within that jurisdiction, up to the limits of state law.

A Hypothetical Example

Perhaps a hypothetical example would make this easier to understand. Imagine a carpenter who sues a contractor after not getting paid for his work. Other subcontractors follow suit. The original contractor picks up and moves everything, including is business, to a neighboring state.

The carpenter learns what has happened. He also finds out where the contractor has moved to. Through his attorney, he discovers the contractor has set up similar business operations in the new state. Right there is the material connection required under the UEFJA. His attorney files the necessary paperwork to have the judgment domesticated in the same county where the contractor now lives and works. Domestication is approved and collection efforts can be initiated.

Domestication is especially important if a creditor or its collection agency wants to file a writ of execution to seize the debtor’s personal property. Without proper domestication, property located across state lines is off-limits. With domestication, it is as readily available as any assets held in the original state.

In a nutshell, it is possible for judgments entered in on state to be collected in another. Thanks to the UEFJA, it is no longer so easy to skip out on a judgment simply by moving to another state. Creditors can now follow.