How to Collect Money After Winning a Judgment

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Winning a money judgment in court is the first step toward collecting a debt. Collecting that judgment requires that you put into play different procedures like wage attachment, bank account levies and real estate liens that can be time consuming and are not always easy.

Winning is winning, right? So if you win a lawsuit and get a money judgment, you may go home and open a bottle of bubbly. On the other hand, maybe you should wait on that champagne. Just because you win a judgment today doesn't mean you'll have the money in your pocket tomorrow, or ever.

TL;DR (Too Long; Didn't Read)

Winning a money judgment in court is the first step toward collecting a debt. But it's only a step. Collecting that judgment requires that you put into play different procedures like wage attachment, bank account levies and real estate liens that can be time consuming and are not always as easy as you might hope.

Winning a Judgment

A trial is exciting and challenging, a game of strategy not unlike chess. The thrill from the victory can be intoxicating, and the post-trial celebration warranted. But keep in mind that winning a judgment and collecting a judgment are two different things.

First of all, there is the time after the judgment is issued when it is on hold to allow the losing party to file an appeal. If an appeal is filed, prepare for a long wait. And even if not, it may be a while before you see a dime.

Collecting a Judgment

State law varies, but all jurisdictions provide a wide range of collection procedures that a judgment creditor can use to collect from a judgment debtor. Some of the most common (and easiest) include putting a judgment lien on any and all real estate owned by the debtor, attaching wages and seizing bank accounts.

A judgment lien is perhaps the first item on your agenda. The judgment itself constitutes a lien in some states, but most require that you perfect the lien by recording the judgment with the recorder's office or your state's equivalent. This serves a few important purposes. It puts other creditors on notice of the lien and prevents the debtor from selling the property without paying off the judgment. It also gives you a better position if the debtor declares bankruptcy.

After this, you may wish to simply ask the debtor for the money. If the debtor is a financially solvent individual or company, he is likely to pay to avoid the costs and energy involved in fighting collection issues. It is probably worth it to offer to negotiate down the amount for quick payment. However, if the person or company is not financially stable and refuses to settle, you may have to resort to playing hide and seek for cash and equity.

One way to avoid that is to conduct post-discovery (written or oral questions) to discover where a debtor has assets and where the income arises. Once you find this out, you can garnish the debtor's wages to collect your judgment, usually up to 25 percent of a paycheck. Schedule a hearing with the court to show that you are owed money and that the debtor isn't paying. You can also "garnish" the debtor's bank accounts.

Other collection methods, like selling real estate and seizing assets, will require an attorney. If the debt is large, it may be worth it to hire one.

References

About the Author

Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.