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How to collect court judgments

Most consumers know they can go to court and sue someone to right a wrong. But they often don't know that courts do little or nothing to help them collect money they are awarded.

Welcome to the hole in the judicial system.

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"Getting a judgment is the easy part," says Roderic Duncan, a retired judge and author of "Win Your Lawsuit: A Judge's Guide to Representing Yourself in California Superior Court." "When I used to preside over a small claims calendar, the people who won would think there was a window where they could collect their money. Collecting a judgment can be hard because, like a divorce, some disputes can be very emotional."

There are several avenues you can pursue in an effort to collect or enforce a judgment. You can attempt to collect the money yourself or hire a lawyer, collections agency or judgment enforcement agent to get the money on your behalf. These professional may have more success collecting the judgment; however, their help comes with a price tag.

The ABCs of judgments
A judgment is verdict from a court that resolves the particulars of a lawsuit or claim and specifies the obligations of the parties involved. For example, if you sue a contracting company for failing to finish a job that it was contracted to perform, or a relative or friend owed you money and wouldn't pay it back, the judgment would specify which party prevailed, which party was responsible for court costs and whether one party owed money to another.

If you have an agreement with another person or company and that agreement wasn't fulfilled, causing you to lose money in some way, you can seek redress in the courts. The amount of money you are owed will in most cases determine where you pursue your case. For smaller amounts, disputes are handled in small claims court. The ceiling on small claims court cases depends on the state.

The lowest ceiling is in Massachusetts -- $2,000 -- while some parts of Tennessee have a $25,000 ceiling. In most cases, ceilings range from $5,000 to $10,000. Most types of smaller monetary disputes between individuals or businesses can be handled in small claims court; however, matters such as divorces can't be handled there. Cases commonly seen in small claims court include landlord-tenant disputes, failure to repay a loan and service disagreements.

In order to collect money you are owed, you must go to court and get a judgment. Once the judgment is issued in your favor -- not a slam dunk because you must prove the merits of your case in front of a judge -- you get a legal document from the court that spells out what you are entitled to receive. Then you can go about enforcing that judgment.

Next: "Approach the judgment debtor with a letter asking for payment."
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