I thought I knew what was going on with Sen. Kruse’s SB 133 concerning the duration of a judgment. But, I wasn’t entirely sure. The law currently says:
Every judgment and decree of any court of record of the United States, of Indiana, or of any other state shall be considered satisfied after the expiration of twenty (20) years.
Under the proposed legislation it would say:
An action to enforce a judgment or decree of any court of record of the United States, of Indiana, or another state must be commenced not later than twenty (20) years after the entry of the judgment or decree.
That language looks fairly similar and, while you can guess at the significance of the changes, the text itself does not provide a great deal of guidance. But, a fiscal impact statement gets prepared for every bill. And, sometimes, you’ll find a plain-English description of what the legislation is attempting to accompish.
For this bill, the fiscal impact statement (pdf) says:
Case law interprets this 20-year statute of limitations to be a rebuttable presumption. This means that if an order was issued by a court more than 20 years ago, the terms of the judgment are assumed to be satisfied unless an opposing claimant proves that the judgment was not satisfied.
This bill would create an absolute outer limit of 20 years on the validity and enforceability of any kind of court issued judgment or decree. Consequently, as proposed by this bill, if a court issues a judgment requiring an individual to pay money to a state or local agency, and the individual fails to pay the judgment within 20 years, then the actions may no longer be enforced.
So, if in doubt, try checking the fiscal impact statement.
Does this mean if by some miracle I win a judgement against a corporation in an Indiana court, it can stall for 20 years so it doesn’t have to pay me?
Nope. It means that you have 20 years to get them to pay up — dragging them into court to discover assets, freezing bank accounts, attaching their accounts receivable and whatnot. If you can’t get the judgment paid within the 20 years, you’re s.o.l.
That’s pretty much how it works now, but this would make the 20 years a hard deadline instead of a rebuttable presumption.
I always thought of the ten years plus a ten year extension on the judgement as a repayment lottery on the hopes that the debtor owns property and decides to sell it.
Yup. Although I’ve only done the extend the judgment lien thing once or twice. If you can’t get it done it ten years, it probably isn’t going to happen.
So what I don’t understand is, why change the language? Who benefits?
I like your tip to read the fiscal impact, but I think there is an alternative reading of the bill. I take the proposed language to mean that the creditor must COMMENCE an action to enforce a judgment within 20 years. So one could wait to garnish wages or attach assets until 19 years and 364 days after the judgment. To me it seems like the action to collect could then extend beyond the 20 years (say the garnishment order was issued in year 19 and wages were garnished for the next 5 years). One time I had a judgment against a defendant who went to jail. I waited out her sentence and renewed the judgment.