Civil law has an entire lexicon filled with words the average person on the street does not understand. There are even words that are defined one way for day-to-day use that mean completely different things in the civil litigation arena. Take the terms ‘renewal’ and ‘revival’. Do you know how they apply to enforcing money judgments?

A money judgment is a civil judgment that involves some sort of monetary award being paid to the winning party. Think of a personal injury lawsuit. Imagine a car accident victim winning $1 million from another driver who caused the accident. Upon winning, the victim has a money judgment.

Statutes of Limitation Are in Play

A money judgment is considered a tangible asset by law. As such, the winning party in a civil lawsuit (a.k.a. the judgment creditor) can either hold the judgment and attempt to collect it or sell it to a third-party. One way or the other, someone is going to try to collect. Collection is typically referred to as enforcement in legal circles.

Among the many challenges judgment creditors face are statutes of limitation. In other words, they only have a limited amount of time to collect. On average, statutes of limitation run 7-10 years. Utah-based Judgment Collectors says statutes of limitation vary by state.

They also say that many states allow judgment creditors to renew judgment prior to expiration. Let us say you have a judgment with a 7-year statute of limitations. During the final month of the seventh year, you can file to renew the judgment if it remains unpaid. In most cases, renewal is a formality. Successfully renewing would give you an additional 7 years to continue collection efforts.

Note that some states allow indefinite renewals. Others allow only one renewal. Still others limit renewal periods, making them shorter than the original terms imposed by law. This is one area in which state variations can be considerable.

Judgment Dormancy and Revival

Renewing a judgment is related to keeping collection efforts going beyond the original statute of limitations. Judgment revival is a completely different matter. It is the result of something known as dormancy.

In some states, a money judgment goes dormant after a certain amount of inactivity by the judgment creditor. Imagine a creditor in a state with a 5-year dormancy period. If the creditor takes no enforcement actions for 5 consecutive years, the judgment is considered dormant.

The creditor could not turn around in the sixth year and start trying to collect, at least not without the court’s permission. The creditor must file a motion to revive with the court. Collection efforts can only begin after the court gives its approval.

Like judgment renewal, revival varies from one state to the next. Many states do not embrace the idea of dormancy. In such states, judgment revival is nonexistent as well. But in states that do recognize dormancy, rules for revival can vary considerably.

This Is Why Experts Exist

If all of this seems confusing, you now know why experts like Judgment Collectors exist. Collection agencies and attorneys specializing in judgments understand how all this stuff works. Your typical judgment creditor does not. Perhaps that’s why the vast majority of money judgments are never collected. Creditors just do not know how it all works.

At any rate, judgment renewal and revival are two separate things. You now know the differences between them. If you should ever find yourself on the winning end of a money judgment, you will have at least one tidbit of information to better help you understand the collection process.