How to Collect on a Judgment

If you prevail in court against the opposing party you will obtain a money judgment against them. That does not mean you get a check for the full amount as well. Often the person that owes you the money, the debtor, will be unable or unwilling to pay. Where do you go from there?

Find out what assets the debtor has.

You can begin by filing an ex parte motion and order for supplemental proceedings. After proper service of the motion and order you can conduct a debtor’s exam. At $20.00 for filing and about $40.00 for a process server, this is a very inexpensive option. If you want to save time you can serve the debtor with a questionnaire that they can answer under penalty of perjury in lieu of attending the hearing.

Obtain a Writ of Execution

This is not as scary as it sounds. A writ of execution is simply an order from the Court directing the sheriff to seize certain assets from the debtors. If you learn that the debtor has non-exempt property, you can file an ex parte motion and order to obtain a writ of execution directing the sheriff to seize the property and sell it. A writ of execution is a great tool but navigating the process successfully is no easy task.

Throughout the process you will need to maintain the element of surprise. If the debtor learns that the sheriff is showing up at the end of the week to seize their rare coin-collection, this coin-collection has a very probability of going missing. Make sure not to telegraph to the debtor that you are executing a writ.

Before the writ is executed, the sheriff will require your client to post an indemnity bond for double the amount of the assets being seized. The premium is typically only 1% of the bond amount so this is not a great expense.

You may also want to obtain a break and enter order and deliver this to the sheriff along with the writ. With this order in hand the sheriff may forcefully enter the property. This order is a very inexpensive tool to ensure that the execution of your writ runs smoothly.

If you are aware of specific assets of the debtor, such as a non-exempt boat or jet-ski, do a title search with the DMV. The sheriff will want proof that the assets being seized are not subject to superior liens. You will want to know this as well so you do not seize a non-exempt corvette only to find that the bank has first position for $40 grand. If you know a title officer they will often do this search for free.

Obtain a Writ of Garnishment

If you discover the debtor has liquid assets file a writ of garnishment against his or her bank accounts as soon as possible. The bank is only obligated to turn over the non-exempt funds in the account at the time you execute the writ so a debtor can easily withdraw funds ahead of time. If you know when your debtor gets paid plan on delivering the writ to the bank around that time. Since you can recover filing fees, service fees, postage, etc. garnishing a bank account is a great tool.

Consider also whether the debtor has other garnishments in place. If you clear the first few hurdles but find that the debtor pays child support and alimony you are not likely to recover enough to make the writ worthwhile. When doing your own cost/benefit analysis, keep in mind that the writ is only good for 60 days before you have to reissue and you can only recover up to 25% of the debtor’s pay.

Appoint a Receiver

If the debtor has income producing property you may have grounds to have a receiver appointed by the court to manage the debtor’s income-producing property. An example would be if the debtor was a landlord and had a tenant that paid monthly rent. Although a receiver is relatively expensive, charging $500.00 or more a month, if there is steady rent coming in above that amount it would be worthwhile.

Keep in mind that you have these and many other collection tools available. By determining the debtor’s asset situation you can choose the tool that is right for you. You may even find that after a few seizures and garnishments the debtor may be more willing to work with you to satisfy the judgment. Good luck!

Legal Disclaimer: The information on this page does not constitute legal advice and should not be relied upon as each situation is fact specific and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. The information on this page is solely for the purpose of legal education and is intended to only provide general information about the matters stated therein. The information on this page should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area of the matters stated therein. No attorney-client relationship is formed without an actual agreement confirmed in writing. I am licensed only in Washington and Oregon.