Collecting On A Judgment

Collecting On A Judgment

Sometimes, winning your case is only half the battle… and not even the worst part. There are times when the other party doesn’t pay you the judgment you’ve won and are owed. In order collect, you may have to pay more money and do a few more things.

Those who have the means generally pay judgments entered against them quickly, as collections actions can cost more and are quite unpleasant. But, in cases where the other party, for one reason or another, doesn’t pay the judgment, there are avenues to collect. Most states require you to use an attorney in your efforts to collect on a judgment.

If, after a certain amount of time has passed following a judgment (usually around 30 days), you can do more discovery into the financial situation of the debtor. If the judgment is against an individual, you can garnish wages. You can also garnish individual and/or business bank accounts. If you’ve won a judgment against a business, you can sometimes have the sheriff seize money and other assets. Money often comes directly out of the cash register, and assets can include machinery or equipment at the business that can be sold to cover the judgment. You can collect on a judgment for up to ten years in most states, and that can usually be renewed at the end of that term for another ten years. This means that you can collect on a judgment from assets that a person or business doesn’t have now, but that they will have in the future.

If the debtor owing you in a judgment files for Chapter 7 bankruptcy protection, you will lose your ability to collect on that judgment under the automatic stay. There is the possibility that you might receive a higher priority than other creditors the debtor owes, depending on the type of other debt the debtor has when he or she files for bankruptcy.

In order to collect on a judgment if the debtor lives in another state, or the debtor’s property or assets is in another state, you will need to record your judgment in that other state as a foreign judgment.

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