Accounts Retrievable Systems - Collecting A Small Claims Judgment
Winning in small claims court is only half the battle. Nationally, 79 percent of small claims judgment debts are never recovered. Many judgment debtors, the losing party, prove “judgment proof,” meaning they are unable to pay due to extreme lack of assets. While a great number of judgment creditors, the parties who won the judgment, simply give up once collecting from an elusive judgment debtor becomes too time-consuming. However, perseverance and using a variety of legal tactics can increase a judgment creditor’s chances of recovering the court-awarded debt.
1. After the Judge’s Ruling
Try to collect from the judgment debtor immediately after the judgment is given. Approach him while still in the courthouse and obtain a commitment from the judgment debtor.
Allow the allotted time for payment to pass without provoking or asking him to pay voluntarily. Depending on the state, the length of time can vary between two and 30 days.
Check with the court clerk to find out if the judgment debtor has filed an appeal. Depending on the state and court, you can do this online, on the phone or with a letter of request. A losing party may have anywhere from two to 30 days to file an appeal. If an appeal has been filed, you must wait until it’s been decided before using legal procedures to try and collect the debt.
If the time allotted has expired, send a certified letter to the judgment debtor demanding payment for the full amount the court awarded. Ask to receive payment within a limited amount of time. Include the case number and keep a copy for your records.
2. After the Time Has Expired
Request that the court order the judgment debtor to submit a written disclosure of assets and income or a Judgment Debtor’s Statement of Assets if the person refuses to pay. Use the information to determine if the debt owed can feasibly be collected and if so, from which asset.
Uncover the judgment debtor’s assets even if he failed to complete the Statement of Assets by applying for an Order of Examination. This order requires the judgment debtor appear in court for questioning regarding his assets. Ask the court to issue a bench warrant for his arrest if he does not appear.
Compile a list of of financial questions to ask at the judgment debtor examination. Ask questions about his living situation, employment, marital status, bank accounts, credit cards, real property and more. And take notes. This information is a database of property you may eventually have to take through process of the law.
Pay the fee to have the court clerk issue an Abstract of Judgment-Civil to put a lien on the debtor’s property. Take or mail the Abstract of Judgment to the County Recorder’s office in the county where you believe the debtor owns real property. You will not be paid automatically, but if there is a refinancing or sale of the property, you should get paid your money with interest.
Petition the court to issue a Writ of Execution to garnish the debtor’s wages. You’ll then need to prepare an Application for Earnings Withholding Order. Many counties require you to hire a process server to serve the employer with the necessary papers to make sure you will be paid.
Tips & Warnings
Consider a payment plan if the judgment debtor is unable to pay the full amount all at once.
Let the judgment debtor know he can make payments through the court if he does not want to deal with you.
Encourage the debtor to pay you voluntarily. If you are too aggressive in collecting your judgment, the debtor may file for bankruptcy.
Make a copy of the judgment.
You can ask a lawyer or collection agency to help you collect your judgment. But you may have to pay a percentage of the judgment in fees.
Do not threaten physical harm at any time during the process.
Avoid any illegal activity when trying to receive payment.
If the defendant’s correct name is different from what’s written on the judgment, you need to ask the court for a new judgment with the correct name.
Article Source: www.ehow.com
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