Legal Definitions - poundage fee

A poundage fee is a percentage-based charge that a sheriff or a similar court officer receives for successfully collecting money or assets on behalf of a creditor, as directed by a court order. This fee compensates the officer for their efforts in enforcing a judgment, such as seizing property or garnishing wages, to satisfy a debt.

Here are a few examples to illustrate how a poundage fee might apply:

• Business Debt Collection: Imagine a small manufacturing company that won a lawsuit against a client who failed to pay for a large order of custom parts. Despite the court judgment, the client still refuses to pay. The manufacturing company then obtains a writ of execution, which is a court order instructing the sheriff to seize assets from the client to satisfy the debt. If the sheriff successfully recovers the outstanding funds by, for example, freezing the client's bank account or auctioning off some of their equipment, the sheriff's office would then charge a poundage fee. This fee, calculated as a percentage of the money recovered, would be added to the total amount the client (the debtor) owes.

• Personal Loan Default: Consider a situation where a person, Alex, lent a significant sum of money to a friend, Ben, who later defaulted on the loan. Alex sued Ben and obtained a court judgment for the unpaid amount. When Ben still doesn't pay, Alex gets a court order for wage garnishment, directing the sheriff to collect a portion of Ben's paycheck directly from his employer until the debt is satisfied. As the sheriff's office collects these funds over several pay periods, they would apply a poundage fee, which is a percentage of each amount collected. This fee covers the administrative and enforcement costs incurred by the sheriff's office for ensuring Alex receives the money owed to him.