Judgment Collection: How to Turn Your Court Win Into Cash

When civil judgments result in a monetary award, they are known as money judgments. Enforcing a money judgment is essentially collecting the debt. The big question for so many creditors is how to do it. How do they turn a court win into actual cash?

There isn’t a black-and-white formula suitable for every case, according to Salt Lake City-based Judgment Collectors. As a specialist collection agency that only works on money judgments, Judgment Collectors say every case is different. There are all sorts of circumstances and factors that need to be considered.

Debtor Income and Assets

Turning a court win into cash relies entirely on the income and assets a debtor has to offer. A debtor with little to no income and no high-value assets to speak of is very difficult to collect from. And if he also has no prospects for the future, he is considered judgment-proof.

Figuring out a debtor’s income and assets is the first step in collection. The process is known as discovery, and creditors have a variety of means of going about it:

• Interrogatories (written questions and answers)
• Requests for Production (furnishing requested documentation)
• Debtor depositions (answering questions under oath)
• Third-party subpoenas (employers, banks, etc. can be subpoenaed)
• Public record and private database searches

It is in a creditor’s best interest to look around every corner and turn up every stone in search of income and asset information. A creditor’s collection success is often tied to the quality of the information learned during discovery.

Creditor Collection Options

Once a creditor understands the scope of a debtor’s income and assets, he can determine which collection strategies to pursue. First on the list is the voluntary payment plan. A voluntary payment plan is the easiest for everyone. Note that some states require court approval of any such plan.

If a payment plan is out of the question, creditors have other options:

• Lump Sum Payment – A creditor could accept an immediate lump sum payment for a lesser amount in order to get the matter settled quickly.
• Garnishment – A creditor might choose to garnish the debtor’s wages or bank account. Garnishing both might be even better.
• Judgment Liens – Creditors often place judgment liens on debtor property. Liens are very persuasive collection tools.
• Writs of Execution – Writs of execution are even more persuasive because they guarantee payment. A writ of execution authorizes the local sheriff to seize and sell debtor property.

Judgment Collectors say most cases require a combination of collection strategies. That’s why it is in a creditor’s best interest to thoroughly understand the process before beginning collection.

Professional Help Is a Good Idea

Judgment Collectors also say that hiring professional help is a good idea. Specialized collection agencies and attorneys are the best option, in that order. Both have the skills and knowledge to gather information and pursue the most profitable options.

Even with professional help, collecting can take time. Rare is the money judgment paid fully within weeks of the court case. Most take at least a few months to settle. Some judgments stretch on for years. That being the case, it is also important that judgment creditors understand the statute of limitations in their respective states.

A Long-Term Exercise

The complex nature of judgment collection dictates that it is a long-term exercise most of the time. Creditors need to prepare themselves for the long haul if they want to be paid. Those willing to hang in there and take every opportunity are the ones most likely to succeed. A creditor willing to give up too easily might not see a penny.