When you "win" a civil case in court, the jury or judge may award you money damages. In some situations the losing party against whom there is a judgment (also known as a debtor), either refuses to follow the court order or cannot afford to pay the amount of the judgment. If this happens, you may be required to take additional steps and incur further expenses to collect the judgment. Here are ten things to keep in mind when collecting money after a judgment:
1. Individuals and businesses that are financially stable usually pay judgments that are entered against them. They do so because they want to avoid unpleasant "collection" activities and further costs.
2. If an individual or business debtor stubbornly refuses to pay a judgment or is insolvent (meaning business or person’s debts are greater than its assets), you may find it quite difficult to collect a judgment.
4. When you hold a judgment against an individual, you can garnish his or her wages to collect your judgment. Many states limit the amount you can garnish from a debtor's wages to 25 percent of the debtor's paycheck. To garnish wages, you generally must schedule a hearing with the court and prove that the debtor owes you money and has failed to make payments.
5. Similarly, you may also garnish the bank account of an individual or business debtor.
6. If you hold a judgment against a company, you may be able to get the sheriff to seize the money in the company's cash register. Businesses may also have machinery, equipment, or other assets that are available to seize. For your safety, and to avoid further litigation, only law enforcement or other authorized persons should seize property.
7. The time period for collecting judgments in many states is ten years, but after that expires you can usually renew the judgment for another ten years. So, even if the person or business that you have a judgment against does not have any income or assets today, income or assets may be accessible in the future.
8. Unfortunately, if the person against whom you have the judgment files a Chapter 7 bankruptcy, your ability to collect is cut-off, like most other creditors.
9. In most states, you will need to retain an attorney to assist you with your collection efforts. You can typically hire a collection attorney on an hourly basis or pay the attorney a percentage of the amount collected.
10. To collect a judgment against a debtor or a debtor's property located in another state, you will need to record your judgment as a foreign judgment in that state. A court cannot enforce a foreign judgment unless the debtor has “sufficient contact” with the state. Usually, you will want to file the foreign judgment in the county where the debtor lives or where the property is located.
For help understanding your legal rights and starting collection procedures for your judgment, you may consider contacting an attorney in your area.