Executing Judgments On Property in Colorado

After pursuing a lawsuit and getting a judgment from a court, what happens next? After issuing judgments, courts are not proactive in enforcing them. Rather, the prevailing party must take action to collect on a money judgment.

If a judgment is large enough, it may be impossible to recover the judgment amount in a timely and efficient manner by garnishing the judgment debtor’s bank accounts or wages. However, targeting bank accounts, wages, and other liquid assets is not the only means to collect.

The purpose of this article is to outline the process for executing a judgment on goods, real estate, and other forms of nonliquid property. To be clear, this article does not go into rules and procedures specific to obligations surrounding alimony and child support or foreclosures on secured instruments such as mortgages.

Creating a Judgment Lien

Typically, the first step after getting judgment in your favor is to request an official transcript of judgment from the Court and then record that transcript in the county where the judgment debtor is based. C.R.S. § 13-52-102(1).

Recording a transcript of judgment in a county creates a lien on all real property owned by the judgment debtor in that county and any property in that county that the debtor later acquires. Id. It is very important to understand that a judgment alone does not create any kind of lien and that a transcript of judgment must be recorded to create a lien on real property.

This type of judgment lien lasts six years from the date of the judgment, not the date of recording the transcript, before expiring. Id. However, a judgment creditor can revive a judgment, obtain a renewed transcript of judgment, and record the new transcript to revive the judgment lien for another six years from the date of the revived judgment. Id.

A judgment is enforceable in this manner for 20 years following that judgment's original date of entry. C.R.S. § 13-52-102(2)(a). A judgment expires after 20 years unless revived to last longer. Id. It is worth noting that this process is a little different for county court judgments, which must be revived within the first six years after the judgment or they expire. C.R.S. § 13-52-102(2)(b).

Collecting Through a Writ of Execution

With a judgment lien in place, the next step for collecting is through a mechanism called a Writ of Execution. C.R.C.P. 69(a). This is a formal order from a court that directs the sheriff of the relevant county to seize and sell the property specifically identified in the Writ to satisfy the judgment in question. A court from one county can issue such a writ to a sheriff of another county without any problem. C.R.S. § 13-52-110. However, a sheriff cannot carry out a Writ of Execution if it is addressed to the sheriff of a different county. See McArthur v. Boynton, 74 P. 540 (Colo. 1903).

Following the issuance of a Writ of Execution to the appropriate sheriff, it is the judgment creditor’s responsibility to serve the judgment debtor with a Notice of Levy, which makes clear to the judgment debtor what property is being seized and sold and provides notice of the debtor’s ability to claim exemptions. C.R.S. § 13-55-102. The sheriff or other officer making the levy must also record a Certificate of Levy with their County Clerk and Recorder to put other creditors and potential bona fide purchasers on notice that the property in question is being sold to satisfy an existing judgment. C.R.S. § 13-56-101.

Before conducting a public real estate sale pursuant to a Writ of Execution, the sheriff must advertise the sale in a local newspaper or by posting the notice in public places if no such newspaper exists. These advertisements must continue for at least 20 consecutive days and describe the property and the time and place of the sale. C.R.S. § 13-56-201(1).

Important Considerations

It is important to note that judgment lien functions like any other lien on property in the context of priority. In Colorado, the priority of the lien is based on when it was recorded. As such, a judgment lien will not likely be paid from a sale of the property before an existing mortgage unless the mortgage was never recorded. See Donahue v. Kohler-McLister Paint Co., 254 P. 989, 990 (Colo. 1927).

It is also important to be aware of property that is exempt from execution pursuant to a judgment. Most notably, Colorado law establishes a homestead exemption that protects a debtor’s equity in their primary residence. See C.R.S. § 38-41-201. This article is not meant to delve into the details of the homestead or other exemptions established by law. Still, it is worth noting that the law establishes a judgment debtor’s residence as a last resort for collection on a judgment. C.R.S. § 13-52-101.

As noted above, satisfaction of a judgment can also take place through the levy and sale of personal property and chattels. The process is the same as previously described in terms of obtaining the Writ of Execution and service of the Notice of Levy. In the case of personal property, however, the sheriff must usually take possession of and store the property in question unless this is practically infeasible. Gottlieb v. Barton, 57 P. 754, 756 (Colo. App. 1899). Like with real estate, personal property subject to execution must then be sold via a public sale in the same manner as the required advertisement in real estate, except that such advertisements need only continue for 10 consecutive days instead of 20. C.R.S. § 13-57-101

Local jurisdictions may also have different requirements regarding judgment creditors putting up indemnity bonds that cover the sheriff’s costs for storing and selling the property in question.

In general, collecting on a judgment through execution on non-liquid assets can get complicated, and making mistakes may force you to start the process over. Depending on the assets at issue, this process can also take some time as the law allows a judgment debtor to object to the levy and sale of certain property based on statutory exemptions. For these reasons, it is generally worthwhile to at least consult an attorney to help navigate collection on a judgment.

If you have obtained a judgment on which you are trying to collect, we may be able to help you. Contact us at either 303-678-0560 or 970-304-0075 to discuss your case further.

This blog is intended to provide general information and, therefore, should not be treated as legal advice. You should contact a qualified attorney for questions about legal issues.