Businesses that extend credit to people, even in situations such as billing the client when a project is completed, sometimes have to take collection actions. This often includes escalating efforts with the process culminating in going to court for a judgment against the debtor.
A judgment in Florida doesn’t mean that the debtor will automatically pay the order. The collection usually depends on being able to find assets, following the right filing steps and getting in line for those assets ahead of other creditors.
A judgment lien in Florida can give a creditor leverage against the debtor’s personal property. While businesses don’t have to file a lien with the Department of State, it can help them to be prioritized when property is seized and sold. This could make the difference between receiving at least a partial recovery and not receiving a recovery at all.
Why does prioritization matter?
When property is found, seized, and liquidated, the proceeds are distributed in a set order. The costs of the process are covered first. After that, the creditors who have judgment liens are paid in order according to when the liens were filed. Because of this, even a short delay in filing can have a drastic impact on the collection position, especially if the debtor has considerable creditors.
Receiving a judgment lien is usually one of the last steps in the collection process. Businesses should ensure that they follow the process precisely so they can collect what they’re due. It may be beneficial for them to have someone on their side who can assist with collection once it becomes clear that the debtor doesn’t have any intent to pay.
