How to collect court judgments |
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Do it yourself
The best circumstances under which to collect a judgment are when
the other party -- known as the judgment debtor -- is willing to
talk to you and has assets, a job or other means of paying the judgment.
Unfortunately, in most cases it isn't that easy.
"Eighty percent of all judgments aren't collected,
says Brian Petrone, who owns a judgment enforcement and bail bondsman
agency with offices in Brunswick, N.J., and Venice, Fla.
"If you're dealing with someone who is gainfully
employed or owns property, you have a better chance of collecting,
but if they don't agree with the judgment, they may try to hide
assets or make it difficult for you to collect," he says. "If
you're dealing with an older person who has no job and no assets
and no prospects of getting a job or any assets, it is probably
not worth the effort to try to collect."
The first step is to approach the judgment debtor
with a letter asking for payment. If there is no response or the
person won't pay, you'll need to find out if the person has a job
and if so, where he or she works, and if he or she owns property
or has bank accounts or other assets. You'll need the name of the
bank or credit union and account numbers.
You can use your judgment to obtain funds from those
sources by going to your county's sheriff or other official. The
Web site Nolo.com has its own step-by-step guide to collecting
judgments.
However, there are some types of wages and property
that are exempt from judgments, so be sure that you aren't running
afoul of your state's laws before attempting to garnish wages or
seize a car or place a lien on property. If the judgment debtor
files for bankruptcy, in most cases you'll be out of luck. Your
judgment will still be valid, but a bankruptcy court will discharge
the debtor from most of his or her debts, including your judgment.
In some cases, money you collect from a judgment during
a certain period before bankruptcy is declared may be subject to
bankruptcy court rules, forcing you to return the funds.
"When I collect on a judgment, I hold onto the
money for 90 days in case the debtor ends up filing for bankruptcy
and I have to give it back," says Mark Shapiro, who operates
Judgmentbuy.com
in San Jose, Calif.
If you decide to turn your judgment over for professional
collection, consider three options.
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Hire a professional: |
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Attorney
If you go this route, a lawyer will contact the judgment debtor
and press for payment.
In most cases, attorneys are paid by the hour for
their time, but in some cases they will defer their fee for a percentage
of the judgment once it is collected. Lawyers who specialize in
collections may work with private investigators, judgment enforcement
agencies or collections agencies.
A database of attorneys specializing in retail collections
is available at the National
Association of Retail Collection Attorneys.
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