Thank you for your interest in our collection agency services. We have been providing superior debt collection services since In this presentation we provide an overview on the judgment collection process. Winning a lawsuit results in getting a judgment. But that alone does not guaranty you get paid. It is simply a court ruling that says the debtor owes the money. Now we have to collect. The clerk of the court needs to issue the judgment.
This typically takes 2 to 4 weeks, but with governmental budget cuts, there have been a few occasions where this has taken 4 to 6 months. Once the judgment is issued, it then needs to be recorded at the state level and also be recorded in any county where the debtor owns real estate. They may still negotiate the amount they pay or a payment plan.
Everything is negotiable. There are several approaches one can use via the courts to try to collect on a judgment. Each one takes time and involves expenses.
We will review each one separately. A bank levy or garnishment will be issued by the court upon request. You need to know where the bank account is. The levy typically should be served at the branch where the account is open, not just any branch of the bank. The levy must be delivered by a court appointed organization, which typically is the local sheriff or marshal. Unfortunately, this can mean long delays from the time the court issues the levy to the time it is delivered.
You are entitled to any available funds on the day the levy is served. It does not automatically get applied on subsequent days. So, if you are fortunate and there is a lot of money in the account when it is served, then we will get a big payout. Is the potentially large value stored in your debtor's personal assets worth the work to obtain the amount that you're owed?
As mentioned above, judgments aren't permanent. However, they are renewable, a feature that can help with debts that take years to collect which, believe it or not, isn't unheard of. A renewed judgment is often valid for as long as the original judgment was valid, starting from the date of renewal.
Each state's court system handles judgment renewals differently, so speak with a debt collection lawyer about how to go about this process. After the debts are paid, the judgment creditor submits a "satisfaction of judgment" notice to the court. This notice informs the court that it can close the case. Similarly, if you perfected a lien on the debtor , as described earlier, you would file paperwork with the aforementioned recorder's office.
Collection agencies are often viewed as a measure to be taken after standard communications with a nonpaying client have failed but before a lawsuit is filed. Some collection agencies, however, specialize in collecting debts from debtors who defy judgments. There are freelance creditors , too.
However, for small business debt collection , agencies can be too expensive to merit their work, given what they are likely to recoup. In either case, you'll pay quite a bit. If, though, you feel that collection agencies are your best route for collecting on a judgment, consult our recommendations for the best collection agencies to find the right partner for your needs. How to Collect on a Judgment. Max Freedman. When suing a debtor, having a judgment in your favor is only part of the battle.
There are several steps you may have to take to recoup what you are owed. Once a judgment is issued, the debtor must either file an appeal or pay you. Following a court ruling, judgment debtors must file a financial disclosure report listing their assets, or a judge may order a debtor to appear in court for a debtor's examination. You can collect on a judgment by filing a lien, seizing the debtor's assets seizures or renewing the judgment. This article is for business owners looking to collect a debt following a court ruling.
What happens once a judgment is made? Judgment debtors and assets Shortly after a judgment is issued, the debtor must file a financial disclosure statement.
Judgment creditors should attend this examination, and the debtor should disclose all of their assets in each of the below categories: Cash Checking and savings accounts Investment accounts Business ownership shares Trusts and inheritances Safes, vaults and other secure storage spaces Real estate Personal property, including homes, vehicles and jewelry Property transfers, as properties transferred for prices below their fair market value may indicate fraud intended to circumvent debt If a judgment debtor doesn't appear for an ordered examination, the judge may issue an arrest warrant.
Which judgment debtor assets should you pursue? You can do so by: Garnishing the debtor's wages Taking cash or assets directly from businesses the debtor owns Seizing real estate or vehicles Often, the first two approaches are easier than the third one.
How long does it take to enforce a judgment? How to collect on a judgment To collect on a judgment, take the following steps. Perfect a real estate lien. Reach out directly. Choose the right assets to seize. However, consider the following as you do so: Wage garnishment is easy but slow. It's often straightforward to obtain a writ of garnishment requiring that part of your debtor's wages be garnished and given to you. Additionally, some low-income debtors may be exempt from garnishment, and government benefits payments cannot be garnished.
Business asset seizure requires enforcement. Only law enforcement authorities can seize cash, money stored in bank accounts or other assets. As indicated above, a Judgment from City Court may be levied only against personal property of the Judgment Debtor. If the Debtor should move or if the Debtor owns real property in another county, the Creditor may obtain a Transcript of the Judgment from the County Clerk's office and file it in another county within New York State.
Once a Transcript is filed with the County Clerk, there is a public record of the Judgment against the Debtor which could affect the Debtor's credit rating or ability to borrow money. A Judgment against the Debtor remains as a lien against real property for a period of ten 10 years, renewable for an additional ten 10 years. The Creditor should also be aware that once a Transcript of Judgment is filed with the County Clerk, any future matters concerning the enforcement of the judgment become the jurisdiction of the County Court, not the City Court.
The only proceeding which can be initiated in the City Court after the filing of the Transcript is for the issuance and enforcement of an Information Subpoena. In addition to a lein on personal property , a Judgment Creditor may also use other enforcement methods to collect a debt. The Creditor can file an Income Execution or wage garnishment to obtain a percentage of the Debtor's earnings to apply to the Judgment. The judgment creditor may contact the Sheriff's Civil Department for the procedure to file an income execution or wage garnishment.
Again, as with the procedure for seizing personal property, the Creditor will need to inform the Sheriff about certain information, namely, the Debtor's employer, the employer's address and wages of the Debtor. Additionally, a Transcript of Judgment must be filed with the County Clerk before the Sheriff will proceed to enforce a judgment by income execution.
If a Debtor files for bankruptcy during the collection proceedings, then all further collection efforts cease until the Debtor is released from Bankruptcy Court. The Creditor should contact the trustee in bankruptcy to determine if the debt will be paid or discharged by the Bankruptcy Court.
If a Transcript of Judgment has been filed with the County Clerk, once the Debtor pays off the Judgment, the Creditor has a legal responsibility to prepare and sign a Satisfaction of Judgmentfor the benefit of the Debtor, so that all liens and record of Judgment can be removed from the County Clerk's office.
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