If you receive a judgment by a court ordering someone to pay you money, the court will not collect the judgment for you. You must collect it yourself. A judgment is not collectible until the time has expired for the debtor to appeal the ruling. This is typically 30 days but could vary by jurisdiction. After expiration, however, you can move to collect on the judgment. If the debtor does not pay the full amount immediately (or agree to a payment plan), then you can move to seize assets, or even suspend the debtor's driver's license, in order to satisfy the judgment. If the debt is not collected within 10 years of judgment, the judgment will expire and you will be unable to collect the debt unless you file to renew the judgment.
Steps
Contacting the Debtor Yourself
- Write to the debtor. In your letter, encourage the debtor to pay their debt. Give them an address to send their payment, as well as your contact information in case they have to contact you.[1]
- Include what forms of payment you will accept. If you will accept credit cards, tell them. The more payment options you offer, the more likely it is the debtor will be able to pay.
- Request that all communication be handled in writing. This will give you a record of everything that happens should you need it down the road.
- Ask for your money all at once. If you request all of your money up front as a lump sum payment, consider giving the debtor a discount, which might include an interest waiver.[2] Doing this will incentivize the debtor to pay it all at once and it will allow you to move on and not have to worry about collecting money in the future.
- Consider drafting a payment plan. If the debtor cannot satisfy the debt all at once, put together an agreeable payment plan. Try to agree to a plan that is feasible for the debtor. If the debtor can afford the payments, they will be more likely to make them.
- If you and the debtor agree to a payment plan, fill out a Stipulation for Time Payments and file it with the court once you and the debtor have signed it.[3] This form makes the court aware of the payment plan, which will be helpful if the debtor fails to make their payments.
- If you and the debtor cannot agree on a payment plan, a lot of states will allow you and the debtor to file requests to make payments, which are documents asking a judge to incorporate a certain payment plan.[4] Each party will get to file their own request, and the judge will decide on an acceptable payment plan after analyzing both requests.
- File an Acknowledgment of Satisfaction of Judgment. Once you have been paid in full, you will need to obtain and fill out an Acknowledgment of Satisfaction of Judgment form. This form can be accessed online at your local court's website, or by going to your local courthouse and talking with the clerk of courts.
- Mail a copy to the debtor, file a copy with the court, and keep a copy for yourself.
- If you fail to file an Acknowledgment of Satisfaction of Judgment, or fail to notify the debtor by sending them a copy, you could be liable for any damages suffered by the debtor.
Seizing Assets Using a Writ of Execution
- Know when you can start the seizing process. Once judgment is entered against the debtor, the debtor will have a 30 day period in which they can appeal the judgment or ask the court to vacate the judgment.[5] After this 30 day period has passed, and if you have not been paid in full, you may move to seize the debtor's assets in order to satisfy your judgment.[6]
- Find out the location of the debtor's assets. Before you can seize a debtor's assets, you will need to be able to tell the sheriff (who is responsible for the actual seizing process) where the assets are located.[7] To find a debtor's assets, (i.e., bank accounts, wages, and other personal property), you can take any of the following actions:
- Look at the information contained in the Statement of Assets, which is a form the debtor may have filled out after judgment was entered.[8] This form requires the debtor to reveal the location and identification of all of their assets.[9]
- If the debtor failed to fill out and return a Statement of Assets, you can get the court to order the debtor to return to court in order to reveal the location and identification of their assets.[10] If the debtor shows up to court, the judge will ask them about the assets. If the debtor does not show up, a warrant may be issued for their arrest.[11]
- If all else fails, you can try and locate the debtor's assets on your own. You might try contacting the debtor and their family and friends, or you may try and locate them by hiring an investigator.
- Complete a Writ of Execution. Once you know the location of the debtor's assets, you will fill out and file a Writ of Execution, which is a form issued by the clerk of courts that describes the details of a judgment and empowers a sheriff to seize assets.[12]
- A Writ of Execution can be found online at your local court's website, or you can go to the courthouse in person to obtain one.
- There is usually a fee associated with having a Writ of Execution issued.[13] Check with your local court to see what the fee is and if it can be waived.
- Garnish the debtor's wages or seize their personal property. The two most common assets seized are wages and bank accounts.[14]
- If you are garnishing a debtor's wages, you will need to fill out an Application for an Earnings Withholding Order, which asks the court to issue the Order telling the debtor's employer to give the sheriff a portion of what they earn until the judgment is paid.[15] This form can usually be found online or by going to your local courthouse in person.
- If you are seizing the debtor's personal property (e.g., bank accounts and vehicles), there is usually no additional paperwork needed besides the Writ of Execution.
- Give the necessary information to the sheriff, along with their fee. In addition to giving the sheriff a copy of the Writ of Execution and any other documents you have filled out (i.e., the Application for an Earnings Withholding Order), you will need to provide the sheriff with detailed instructions.[16] These instructions tell the sheriff what you want them to do and where they can find the property.[17]
- The sheriff will also request a fee for their services. The sheriff's fee will vary depending on what you are asking them to do. In California, for example, the sheriff's fee may range from $35.00 for seizing a bank account to $1,800.00 for seizing and selling a vehicle.[18]
- File an Acknowledgment of Satisfaction of Judgment. Once you have been paid in full, you will need to obtain and fill out an Acknowledgment of Satisfaction of Judgment form. This form can be accessed online at your local court's website, or by going to your local courthouse and talking with the clerk of courts.
- Mail a copy to the debtor, file a copy with the court, and keep a copy for yourself.
- If you fail to file an Acknowledgment of Satisfaction of Judgment, or fail to notify the debtor by sending them a copy, you could be liable for any damages suffered by the debtor.
Recording a Lien
- Know when you can start the recording process. Before you can record a lien, which will give you an interest in property owned by the debtor, you must wait for a certain period after you receive a judgment against the debtor (usually 30 days).[19]
- Complete an Abstract of Judgment. After the waiting period is up, you will need to obtain, fill out, and file an Abstract of Judgment.[20] This form puts a lien on any land or building owned by the debtor.[21]
- To find this form, go to your local court's website or visit your local courthouse in person.
- There is usually a fee associated with filing an Abstract of Judgment.[22] Check your jurisdiction's fee schedule to get an idea of what the fee might be.
- Record the original issued Abstract of Judgment. Once the Abstract of Judgment has been issued by the court you filed it with, you will need to take the Abstract of Judgment to the Recorder's Office in order to have it recorded.[23] As a rule of thumb, record the Abstract of Judgment with the County Recorder's Office in the county where the debtor lives or has their place of business.[24] You can record the Abstract of Judgment in as many counties as you want.
- Each time you record the Abstract you will have to pay a fee. Contact the County Recorder's Office you are going to record in and ask about the fees they charge.
- File an Acknowledgment of Satisfaction of Judgment. After your debt has been satisfied, you will need to obtain and fill out an Acknowledgment of Satisfaction of Judgment form. This form can be accessed online at your local court's website, or by going to your local courthouse and talking with the clerk of courts.
- In addition, you will need to name every county you recorded an Abstract of Judgment in and will need to have that information notarized.[25] You will then need to take this acknowledgment and have it recorded in all of those counties (there will be a fee for recording each acknowledgment).[26]
- Mail a copy of these forms to the debtor, file a copy with the court, and keep a copy for yourself.
- If you fail to file an Acknowledgment of Satisfaction of Judgment, or fail to notify the debtor by sending them a copy, you could be liable for any damages suffered by the debtor.
Suspending the Debtor's Driver's License
- Know when you can suspend a debtor's driver's license. If your judgment comes from a car accident in which the debtor was at fault, you can ask to have the debtor's driver's license suspended.[27]
- Wait 30 or 90 days from the date of judgment. Depending on the amount owed by the debtor, you will have to wait a certain period before filing the required form.
- Fill out the required form. After you have waited for the required period, you should obtain and fill out the necessary form with the court that handed down the judgment. These forms can usually be found online at your local court's website, or in person by going to your local courthouse.
- In California, if the judgment is over $750.00, you will need to fill out a Certificate of Facts Re Unsatisfied Judgment.[30] This form will ask you to briefly explain your situation and state that you are eligible to request this service.
- In California, if the judgment is under $750.00, you will need to fill out a Notice of Unsatisfied Judgment.[31] This form will ask you to briefly explain your situation and state that you are eligible to request this service.
- File the form with the clerk of courts. Once you have filled out the required form, file it with the clerk of courts where the trial was held that found the debtor responsible for the car accident.[32]
- Pay the required fee. When you file the form with the clerk of courts, you will be required to pay some sort of filing fee. Check with your local court in order to obtain information about the fee and if there is a potential fee waiver.
- File an Acknowledgment of Satisfaction of Judgment. After your debt has been satisfied, you will need to obtain and fill out an Acknowledgment of Satisfaction of Judgment form. This form can be accessed online at your local court's website, or by going to your local courthouse and talking with the clerk of courts.
- In addition, you will need to sign a form that will be sent to you by the Department of Motor Vehicles (DMV) and you will have to send this form to the debtor so they can have their driver's license reinstated.[33]
- Mail a copy of these forms to the debtor, file a copy with the court, and keep a copy for yourself.
- If you fail to file an Acknowledgment of Satisfaction of Judgment, or fail to notify the debtor by sending them a copy, you could be liable for any damages suffered by the debtor.
Warnings
- The judgment debtor can stop your collection efforts by filing for bankruptcy. If you are notified as a creditor, you must stop all garnishments, levies, and other collection efforts.
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Sources and Citations
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