You poured months (or years) into your case. You gathered documents, deposed witnesses, and presented your arguments. So when the verdict fell in your favor, you probably felt a huge sense of relief. But as you know, winning in court is only half the battle.
Let’s take a look at some of the essential steps of post-judgment collection, so you can make sure your legal victory translates into real, tangible results for you and your clients.
Understand Your Judgment and Its Scope
First, you need a crystal-clear picture of what you’ve won. A judgment is a legal order obligating the losing party (the judgment debtor) to satisfy a debt, pay damages, or perform another court-ordered act. To enforce that order, you must know:
- The amount owed: Confirm the exact dollar figure, including interest and court costs.
- Who owes it: Is it an individual, a corporation, or another entity?
- What the judgment covers: Compensatory damages, punitive damages, attorney fees – verify every component.
Without this clarity, your collection efforts will be misguided and won’t have nearly enough structure to be successful.
File a Writ of Execution or Abstract of Judgment
Once your judgment is final and any appeal period has lapsed, you can convert it into an enforceable lien or levy. Two common tools are:
- Writ of Execution: This authorizes a sheriff or marshal to seize non-exempt assets – like bank accounts or personal property – and sell them at auction to satisfy the debt.
- Abstract of Judgment: Recording this with the county recorder places a lien on real property. If the debtor tries to sell or refinance, your judgment lien must be paid off first.
Choose the tool that fits your debtor’s situation. If they own real estate, filing an abstract can thwart any attempt to hide equity. If they cling tightly to their home but have other assets, a writ of execution can hit bank accounts or vehicles.
Locate and Evaluate the Debtor’s Assets
You can’t collect what you can’t find. Asset location is a combination of both detective work and patience. You might do some or all of the following:
- Search public records for property deeds and vehicle registrations.
- Conduct a bank-account examination by filing an Ex Parte Application for Discovery.
- Interview the debtor under oath in a debtor’s examination hearing.
This process helps you map out the debtor’s financial landscape – pinpointing wages, accounts, real estate, or personal property ripe for enforcement.
“Finding out what kinds of property can be used in recovery of judgment depends on the debtor,” attorney Seth Kretzer explains. “Enforcing a judgment debt against a company is easier than against an individual, since the homestead, along with other types of property like a personal vehicle and clothing, is exempt.”
That means if you’re dealing with a corporate debtor, you have a wider array of assets at your disposal, whereas individual debtors enjoy exemptions for their primary residence and personal effects.
Choose Your Enforcement Strategy
With a clear asset map in hand, decide how to move forward:
- Garnish Wages: File for an earnings withholding order. A portion of the debtor’s paycheck (up to the statutory limit) goes directly to you each pay period.
- Levy Bank Accounts: Serve a writ on the bank to freeze and turn over funds up to the judgment amount.
- Place Liens: Record your abstract against real property so that any sale or refinance forces payment.
- Seize Personal Property: Use a writ of execution to take and auction valuables – vehicles, jewelry, equipment.
Each method has costs and timelines. Garnishment can provide a steady stream, but may only reach a fraction of the debt. Bank levies are swift but risk being wiped out by account fees or minimal balances. Balance speed, expense, and yield when picking your tactic.
Negotiate a Payment Plan
Even after you start enforcement, it’s wise to open the door for a negotiated settlement. Debtors facing seizures, liens, or garnishments may prefer a structured payment plan over losing their assets. When proposing terms, offer a fixed monthly payment that you know they can afford. And as part of the agreement, require automated transfers so that you can ensure the payments are consistent.
If you’re extremely concerned about the other party’s ability to pay, you may also want to include acceleration clauses that require the full balance to become due immediately with a single missed payment.
Stay Vigilant and Comply with Renewal Deadlines
Judgments don’t last forever without action. In many jurisdictions, a judgment is enforceable for ten years, but you must renew it before expiration – often in the ninth year. If you miss that window, your judgment becomes dormant, and you lose your enforcement powers.
Set calendar reminders well in advance, and check local rules for renewal affidavits or motions. Staying ahead of deadlines ensures you can pursue lingering unpaid amounts years down the road.
Consider Using a Receivership or Collection Agency
If your debtor is particularly evasive or the asset picture is murky, you might elevate your approach:
- Receivership: Ask the court to appoint a neutral receiver to manage, preserve, and liquidate the debtor’s assets. This is powerful in complex corporate cases where multiple properties or revenue streams are at stake.
- Third-Party Collection Agency: Sometimes outsourcing to a specialist makes sense – especially for smaller judgments where the cost of continued legal action outweighs the recovery.
Remember, bringing in third parties adds fees or commissions, so weigh that against the amount you hope to collect.
Putting it All Together
The job is ultimately done when your judgment is fully satisfied. While you wouldn’t have to jump through so many hoops in an ideal world, that’s not the kind of reality we operate in – is it? Use those lessons you learn from this experience to refine your process for future cases.