Asset Determinations…Fighting the War on Uncollected Judgments

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Asset Determinations…Fighting the War on Uncollected Judgments

You’ve won the case. However, that may not be all that is left to the case itself. If the case was won in your favor and the judge has assigned a judgment, there now comes the issue of collecting the money or property that is owed. There may be an issue with the debtor refusing to pay the claim against them, or they may simply not have the funds at hand to pay the judgment at the time. Whatever the case may be, there are nine important things you need to know and you may have to take extra steps to receive your judgment.  It is important that you keep the following in mind:

1. If the judgment was against an individual or a business who is financially stable and able to pay, they typically will. Most simply do not want to incur additional charges and fees for their refusal to pay. This is the simplest outcome and one that helps everyone move forward.

2. If you find out that the business or person who owes money, also known as the debtor, has higher debts than they do income, this could become a problem. This could signal that you will have more trouble collecting the judgment due to the lack of funds. While this doesn’t always signal that there will be an issue, you will want to be prepared for a long process and you will probably need legal assistance. You do have options:

  • Writ of execution against the defendant’s personal property
  • Garnishing the defendant’s wages or bank accounts
  • Having a lien placed against the defendant’s real property
  • Hiring an attorney with expertise in judgment collection

3. Most states will allow you to perform what they call post judgment discovery. This could mean interrogatories, depositions, or requests to produce paperwork. This will help to reveal what the debtor’s income and assets are to scale the possibility of the payment.

4. When you have won a judgment, it’s important to note that there is a collection time limit. That limit is set to 10 years from the day you’ve received the judgment. You also have the option to renew the judgment if you wish. This means that even if the debtor cannot pay right now, it doesn’t mean they won’t have the assets later on.

5. If you hold a judgment against a company you may be able to get the sheriff to seize machinery, equipment and/or other assets. To avoid further litigation, only law enforcement or other authorized persons should seize property.

6. Always consider hiring the services of an attorney. They will help you collect the debt from the debtor in a legal manner. There are very fine lines to walk when collecting an outstanding judgment and you do not want to cross them as you could be criminally charged for doing so.

7. Garnishing the wages of the person you are trying to collect a debt from is allowed. In most states, there is a limit as to how much can be garnished and that is typically restricted to 25% of the debtor’s paycheck. If you choose to pursue wage garnishment this will mean scheduling a court date and hearing, and providing proof that the debtor owes you funds and has not paid.

8. You should be aware that if the debtor files for Chapter 7 bankruptcy, your ability to collect is halted. You and their other creditors will no longer be able to pursue them for payment of the debt they owe.

9. If your debtor lives in a different state, there are additional procedures for you to follow. You’ll have to file a foreign judgment within the state they reside. You will need to file a judgment in the county which they reside. However, keep in mind that the person or business must have what they call ‘adequate state contact’ for the judge to enforce the judgment.

Use Legal Means of Collecting

No matter what the judgment is or who it’s against, it is imperative that everything is done legally. You, or anyone working on your behalf, do not want to ever take a chance of being accused of using illegal means to collect judgments. You can be criminally charged or sued, regardless of whether you actively participated in the fraud. You cannot pretend to be someone else during the process of collecting the appropriate information and judgments. You must always be straightforward and so must your attorney and other firms assisting you in this matter.

Prudential Associates has worked with local attorneys, corporations, and individuals for over 45 years. We have the resources, knowledge, and experience to assist clients ethically and legally and will not do anything illegal that would compromise the investigation as we assist you with asset determination.

Our office can assist you in legally collecting debts owed to you and help you collect the judgment that was won. Contact Prudential Associates today.  Our bottom line: we do asset determinations and we do them legally.