5 Tips for Collections in the District Court of Maryland
It is not always easy to obtain a judgment in a civil case that has been filed with the court, but oftentimes COLLECTING on the judgment is MUCH HARDER than getting the judgment in the first place. If you have recently obtained a judgment and are having a hard time enforcing the judgment, it is usually a better idea to work with an experienced collections attorney, rather than trying to navigate the collections process on your own. However, I would like to share 5 tips that might be helpful when filing a civil collections matter in the District Court of Maryland:
(1) Don’t Forget to File a Lien! – If you have obtained a judgment at the Circuit Court level, your judgment will automatically constitute a lien on the judgment debtor's interest in land located in the county in which the judgment was rendered. However, at the District Court level, you must take affirmative steps to index and record your judgment as a lien in the Circuit Court for each county in which the judgment debtor owns real property. The easiest way to file a lien for a District Court judgment is to use the fillable form (available on the Maryland Judiciary’s website: www.mdcourts.gov).
(2) Interest Rates – The Maryland Constitution establishes the legal rate of interest at Six Percent (6%) per annum. Generally, a plaintiff may request an award of prejudgment interest at the constitutional rate when the debt owed is for a sum certain and when a written agreement specifically provides for the payment of interest in the event of default. Pursuant to Maryland Code, Courts and Judicial Proceedings, §11-107, the legal rate of interest on a money judgment is Ten Percent (10%) per annum. However, there are exceptions to the 10% post-judgment interest rate. For example, the interest on a judgment for rent of residential premises is capped at Six Percent (6%) per annum. Finally, keep in mind that the court may assess interest at a higher rate if that higher interest rate is expressly provided for by contract.
(3) Wage Garnishments – Maryland Rule 3-646 sets forth the procedures for initiating a garnishment on the wages of a judgment debtor. Social networking websites such as LinkedIn and Facebook can be terrific, free tools when trying to locate a debtor’s place of employment. Considering the vast number of federal employees living in the DC area, it is also helpful to check www.fedsdatacenter.com to verify whether a debtor is a federal employee, particularly because the only information required for a search is the individual’s name.
(4) Monthly Creditor Reports – If you are successful in obtaining a garnishment on a debtor’s wages, it is imperative to remember that you have a obligation to maintain an accounting of payments received for the duration of the garnishment. Under Maryland Rule 3-646, you are required to prepare a Monthly Creditor Report (“MCR”) disclosing all payments received from any source for the account of the debtor including the manner in which each payment was credited. Plaintiff/creditors must prepare MCR’s within 15 days after the end of each month in which one or more payments are received (e.g. MCR for payments received in the month of March 2016 must be completed by April 15, 2016). While MCR’s do not get filed with the court, a copy must be mailed to the garnishee and to the debtor. You must retain a copy of each MCR until 90 days after the termination of the garnishment proceeding and make it available for inspection upon request by any party or by the court.
(5) Automatic Stay on Enforcement of a Judgment – You should be aware that, pursuant to Maryland Rule 3-632, enforcement of a money judgment is automatically stayed until ten (10) days after the judgment has been entered. This automatic stay applies to all post-judgment collections efforts including but not limited to the filing of a lien or for a garnishment.