What Happens When a Debtor Appeals the Order of the Court?

CourthouseYou won your debt collection case. Now your non-paying customer says they are going to appeal the order of the court awarding your judgment. Is this just a tactic to further delay payment or will their appeal prevent you from collecting your judgment?

Whether an appeal will delay enforcement of your judgment to force payment depends on what actions the appealing party takes.

Much to the surprise of the appealing party, filing of an appeal does not prohibit you from enforcing your judgment.

If the appealing party wants to prevent you from enforcing the judgment, they must do one of two things:

  1. Post a bond as security for the judgment
  2. Make an application to the appellate court for an order staying enforcement of the judgment.

Posting a Bond

In order to stay execution of a judgment, the appealing party needs to secure a bond or an undertaking in the amount owed.

The bond or undertaking is given as security. There are both advantages and disadvantages to the creditor. Unfortunately, the process can be timely.  The creditor has to wait until the appeal is perfected and a decision made by the appellate court. The benefit comes if the judgment debtor loses their appeal. Then, the client may collect against the bond and the judgment satisfied in whole.

Appeals Court

If the appealing party wants to prevent you from enforcing the judgment, they can make an application to the appellate court. The requirements, if met, will produce an order from the appellate court. You will not be able to enforce the judgment until after the appeal is perfected, heard, and decided.

The appellate process can take anywhere from six months to a year. The time depends on the court, the order, the complexity of the issues, and other factors.

In order to have the court grant a stay of execution of the judgment, the appealing party must demonstrate a likelihood of succeeding on the merits of their appeal. They must also prove there would be irreparable harm in the absence of the stay and a clear balancing of the equities.

The requirements are difficult to meet — especially if the judgment debtor files their appeal merely to delay payment to the creditor. Arguing that they cannot afford to pay the judgment or it would put them out of business is not enough to meet the burden required for a stay of enforcement of judgment.

Your debt collection attorney should vigorously defend any application to stay execution. If your non-paying client says they are going to appeal the judgment, contact FFGN to discuss your options.