Judicial Sale

The transfer of title to and possession of a debtor's property to another in exchange for a price determined in proceedings that are conducted under a judgment or an order of court by an officer duly appointed and commissioned to do so.

A judicial sale is a method plaintiffs use to enforce a judgment. When a plaintiff wins a judgment against a defendant in civil court, and the defendant does not pay the judgment, the plaintiff can force the sale of the defendant's property until the judgment is satisfied. The plaintiff forces the sale by filing in court for an execution on property, which is a seizure of property by the court for the purpose of selling the property.

Judicial sales are regulated by state and federal statute. In Alabama, for example, the judicial sale process begins when a judgment remains unpaid ninety days after it is placed on the record by the court (Ala. Code § 6-9-21 [1995]). The plaintiff must bring an order mandating payment of the judgment and court costs to the county where the defendant's property is located. This order is called a writ of execution, and it is issued by the trial court. A writ of execution identifies the amount of the judgment, interest, and court costs that the defendant owes the plaintiff.

Generally, a writ of execution may be levied against any real property or PERSONAL PROPERTY of the defendant. The plaintiff must file the writ of execution with the probate judge in the county where the defendant's property is located. The plaintiff must also give notice of the execution on the defendant's property to the defendant. Once the writ is filed, the plaintiff has a lien on the defendant's property. A lien gives the plaintiff a legally recognized ownership interest in the defendant's property, equal to the amount of the judgment.

Once the plaintiff has obtained a lien on the defendant's property, the judicial sale can begin. The process typically must be carried out within a fixed time period, such as within ninety days after the writ of execution is issued. The sheriff's office in the county where the property is located is responsible for levying, or seizing, the property and for conducting the sale of the property.

The sale of real property may take place at the courthouse. If the property that the plaintiff seeks is perishable and in danger of waste or decay, the sale may occur at some other time and place.

A defendant can avoid a judicial sale after a writ of execution is issued, by paying the judgment, interest, and court costs in full. If the defendant appeals the judgment to a higher court, the defendant may postpone the judicial sale by posting a bond to secure the debt during the appeals process. If the defendant does not plan to appeal, and the levying officer is about to seize personal property, the defendant may be able to keep the property until the day of sale if the defendant gives the levying officer a bond made payable to the plaintiff for a certain amount, such as twice the amount in the writ of execution.

Generally, judicial sales are the last resort for a plaintiff trying to collect on a judgment. A defendant who owns or possesses valuable property is usually able to satisfy a judgment in civil court by leveraging the property, or using it to borrow money to pay the judgment.