Let’s say you just won your court case. The judgment order says the defendant owes you a tidy sum, but how do you collect it?
Many people are under the mistaken impression that all they have to do is walk into court and pick up the cash. Unfortunately, it’s not that easy, especially if you’re dealing with an uncooperative debtor. The real challenge may lie ahead.
Some of best means to collect a judgment are through garnishment or levy procedures. This allows you to seize the income or assets of a judgment debtor. While wages are the most commonly garnished assets, any money owed from a third party to the debtor can be subject to garnishment. You could also claim the debtor’s accounts receivables, promissory notes, and proceeds from the sale of a business or real estate. Few people take full advantage of this legal right.
Unfortunately, there are exemptions to what can be garnished.
There are many tools available to collect what is legitimately owed to you. Here are the most common:
Collection agencies. For a fee, you can hand the headache to an agency to get the debtor to pay up. This generally works best in small, uncomplicated situations.
Docketing a judgment. The process involves filing a copy of the judgment where the debtor owns property, creating a lien on those properties.
Liens. The debtor is requested or ordered to fill out a statement of assets against which the judgment can be collected. Or the individual may be asked to appear in court to testify about his or her assets. You can take the statement to court and ask for a writ of execution, which the sheriff typically serves on the debtor’s bank or other institution where the debtor owns personal property. This creates a lien on the assets, which can be seized to pay the judgment. If you are not aware of where the assets are, you may be able to send an information subpoena and restraining order to a bank where you believe the debtor may have assets.
Garnishment. Commonly, a writ is served on the debtor’s employer, who then holds back a portion of wages to pay the judgment. There are limits on the amount that can be withheld.
Installment payments. Sometimes a debtor wants to pay but his or her financial situation makes it tough. You can work out a written installment plan, adding reasonable interest until the debt is paid in full.
Ask your attorney about the best way to help uncover hidden assets so you can collect money that is owed to you.