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Changes to § 8.01-454 Double Fines for Judgment Creditors Who Fail to Acknowledge Payments in a Timely Manner

In 2014, the Virginia General Assembly took steps to help ensure that judgment debtors are credited with payment in a timely manner. The reform to Va. Code § 8.01-454 raises the fine from $50 to $100 when judgment creditors fail to acknowledge with the court that a judgment debtor has made even a partial payment of the amount owed.

The rationale for the change stems from a desire to help consumers and business debtors rebuild their credit ratings after incurring a court judgment on a debt or civil liability. Even after debtors pay what they owe, they often have to wait an inordinate amount of time to have the payment acknowledged. This allows a misconception of their indebtedness to linger as they try to rehabilitate their image with lenders and other financial partners. 

Yet, in seeking to provide relief for the debtor, the Virginia General Assembly has increased the penalty for a technical oversight, which could easily catch creditors unawares. Judgment creditors, who have already incurred great expense to enforce their rights, could face additional costs if they don’t know about the rule change.

Help for debtors could cost creditors

Effective July 1, 2014, if a payment of a judgment does not have to be certified by the clerk of the court, it is the creditor’s duty to acknowledge payment, in part or in whole, within 30 days, by entering it on the judgment docket or the execution book in the office of the clerk.

Failure to comply with this rule within 90 days, or within 10 days of receiving notice from the debtor, exposes the creditor to a $100 fine plus costs.

In our role as legal counsel to condominiums, homeowner associations and housing coops, attorneys at Caulkins & Bruce, PC make sure to inform our clients of pertinent changes in the law, so they are not penalized unnecessarily. We realize that our clients expend time and capital enforcing collection of debts. We want to make sure they understand all aspects of this rule change, especially that it applies to partial payments and not only to complete satisfaction of the judgment.  

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