Last week we discussed what you need to do with your judgment to hopefully be the first in line to collect. This week we’ll discuss some of the tools available to you to locate actual dollars.
Garnishments are inexpensive, quick and have the potential to pay off in a big way. If you have a $100,000 judgment and can identify a bank account that the judgment debtor possesses, you can submit a garnishment request to the court and to the bank, and any money in that bank account held by the judgment debtor should be set aside. Subject to certain exemptions, the money will be turned over to you. The hardest part about garnishing an account is finding the account. This can be a lot easier if you keep a copy of any check that judgment debtor may give you. A copy of a canceled check does the trick. You can also take the deposition of the judgment debtor to gather such information, but this will be more costly and subject to the judgment debtor being truthful.
Items of personal property may also be subject to your judgment. You need to first do a search to see if there are any prior security interests or judgments on the judgment debtor’s personal property. If you have a $100,000 judgment and you can identify that your judgment debtor has a van, you would check to see if there is a loan, a UCC1 or another judgment that encumbers that vehicle. Assuming that there is not, you need to then determine if there is equity in the item making it worthwhile to proceed. Do understand that picking up a car or a boat is an expensive endeavor. You need to have the sheriff involved and pay his fees which are not insignificant. You have to pay a moving company, a bonded warehouse, and the costs of a public auction. The sale of any vehicle has to be published and you must follow all the rules associated with selling someone else’s property. That said, showing up with a flatbed and a sheriff can sometimes turn an uncooperative judgment debtor into someone ready and willing to come up with some dollars.
The mantra of judgment collection comes down to one thing, the squeaky wheel getting the grease. If you are dealing with a judgment debtor that owes you and several others money, the creditor that is the biggest pain to the judgment debtor – showing up and garnishing accounts, going after accounts receivable, sending the sheriff to attach property – that creditor ends up much higher on the list of folks getting paid by the judgment debtor.