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Collecting on a Judgment

On Behalf of | Aug 21, 2013 | Collection

Collection of a judgment, I often tell my clients, is the hard part of the litigation process. Obtaining a judgment against the debtor can often be rather easy to achieve in litigation, especially when a debtor fails to respond to the lawsuit. The real challenge for a creditor and its attorney is attempting to collect on that judgment. Unfortunately, rarely does a judgment debtor receive the judgment and immediately send payment. Instead, the creditor needs to be prepared to chase that debtor to obtain payment.

Fortunately, there are effective ways to collect if, in fact, the debtor has assets. A creditor may use the newly revamped garnishment statute to freeze the debtors bank accounts and/or wages and potentially collect the funds if the debtor has no valid exemptions. If the debtor is a corporation, there will be no exemptions. A creditor may also conduct an asset examination through written discovery or depositions and consider levying on any real or personal property held by the debtor. Further, if the debtor has any outstanding accounts payables or monies owed to the debtor, a creditor may seek collection directly from those sources.

These are just a few examples of ways to collect on a judgment. However, there are many more including piercing the corporate veil and pursuing third-parties for fraudulent transfers of assets. It is important to make sure whoever is attempting to collect on a judgment is familiar with the various collection avenues to effectively pursue collection and not just rely on one method.