In Associated Bank, N.A., v. Jack W. Collier, 2014 WI 62, the Wisconsin Supreme Court (the “Court”) held that a judgment creditor must levy a debtor’s specified non-exempt personal property in order to obtain a priority lien.
Prior to Collier, a judgment creditor could impose an equitable lien, superior to other creditors’ unsecured claims, through service of notice of a supplementary proceeding upon a judgment debtor. In the present matter, however, the Court determined that a judgment creditor serving a debtor with an order to appear for supplemental proceedings did not give rise to a blanket lien on the debtor’s property, thereby allowing other creditors to pursue collection.
The Court ultimately held that a “judgment creditor obtains an interest in a judgment debtor’s identified, non-exempt personal property superior to other unsecured creditors when it dockets its money judgment, identifies specific personal property, and levies that property.”
This decision makes it much more difficult and expensive for a creditor to obtain a lien against a debtor’s property. To ensure continued success in asserting liens against debtor property, creditors should promptly docket any judgments, verify the judgment has been successfully docketed, thoroughly identify the debtor’s specific, non-exempt personal property and levy that property.