In a perfect world, every business owner would make sales on a cash basis, but this isn’t always possible. After all, if your competitors give their customers credit terms, you may have to offer similar terms to get their business. Unfortunately, regardless of how well you scrutinize a customer’s credit rating, some may not pay.
Some customers may take extreme measures to avoid financial responsibility, including canceling their phone service or moving. In such a case, the only legal recourse would be to take the debtor to court. You may ask the court to garnish the debtor’s wages for them to pay you back, but this may not work if the debtor is self-employed or works “under the table.” However, placing a judgment lien on the person’s property may help prompt them to pay you back.
How a judgment lien helps creditors
When you take the debtor to court, you may be able to obtain a judgment lien to help you recover your debt. The court will place a lien on the debtor’s property, prohibiting them from selling or refinancing the asset without first addressing the full amount of the judgment.
The court will also issue a writ of execution to the sheriff’s department, directing them to seize and sell attached real property to satisfy the judgment.
What type of property can be sold by the sheriff?
The sheriff’s department can seize and subsequently auction off different types of properties to pay what you’re owed. Some of the types of properties that the sheriff may seize include:
- Real property: This may include land and buildings. However, the sheriff’s department cannot seize the debtor’s home or homestead.
- Personal property: This may include movable items such as cars, boats, horses, jewelry and furniture.
Some of the debtor’s property is protected and exempt from seizure. Therefore, a debtor may be able to retain a vehicle worth $1,000 or less and one additional asset with a value of less than $1,000. However, partnerships and corporations cannot claim exemptions.
You have a right to get paid
When collecting outstanding debt, your debtor may try to avoid their responsibilities to you. In that case, it’s crucial that you seek legal assistance to help you understand your rights.