Just because you win a judgment in civil court does not mean you are going to get paid whatever monetary award comes with that judgment. To get paid, you may have to take a number of additional steps as dictated by the debtor’s circumstances. Know this one thing: you should never give up and walk away simply because collection is too difficult. There are always ways to get it done.
Below are some proven strategies for turning judgments into cash by way of successful collection efforts. Just bear in mind some wise advice from Judgment Collectors out of Salt Lake City, Utah: states differ in their regulations controlling how judgment collection is handled. Know what your state does and does not allow before you proceed.
Strategy #1: Work Out an Acceptable Payment Plan
The easiest and most successful strategy is to work out an acceptable payment plan with the debtor. Though doing so is not always possible, it is wise to take the opportunity when debtors are amenable. Even if the payment plan route means you will be accepting payments for several years, you avoid more aggressive collection efforts by agreeing to such a plan.
If you really want to avoid having to push the envelope, you might even consider accepting less than what you are rightfully owed as a way to incentivize working out a payment plan. A less than cooperative debtor may quickly change his tune upon learning that he can save 25% by agreeing to monthly installments.
Strategy #2: Garnished the Debtor’s Wages
Although a small number of states do not allow judgment creditors to garnish debtor wages, most do. Garnishment is a legal instrument whereby the debtor’s employer is obligated to deduct so much money from each paycheck and forward it to the creditor for payment. Garnishment continues until the debt is paid in full.
Note that most states in which wage garnishment is allowed restrict the practice to a certain percentage of the debtor’s disposable income. This is to say that you will be limited in how much you can get from each paycheck.
Some states also allow garnishing bank accounts. The principle is the same. A bank account could yield more than wage garnishment depending on a debtor’s assets.
Strategy #3: File a Judgment Lien
If you need to be more aggressive, consider filing a judgment lien against the debtor’s personal property. Judgment liens are almost always attached to real estate, though some states allow attachment to other sorts of assets. A judgment lien prevents the debtor from transferring the property or otherwise disposing of it without paying the debt.
Note that some states protect a judgment debtor’s primary residence against collection efforts. But a lien might still be possible against a vacation home, investment property, etc.
Strategy #4: Petition for a Writ of Seizure
The most aggressive form of judgment collection involves petitioning the court for a writ of seizure. A writ of seizure is a court order permitting the seizure and sale of qualified property to satisfy the judgment. The local sheriff handles the actual seizure and sale. Proceeds from the sale are forwarded to the judgment creditor for its representative.
All these strategies have been proven effective in turning judgments into cash. It is worth noting that judgment creditors often need to employ multiple strategies to get full payment. It should also be noted that there are judgment-proof debtors. They are people from which there is no reasonable hope of collecting due to a lack of income and valuable assets. Judgment-proof debtors are the only ones worth walking away from.