Many assume that winning their court case is the story’s end. The debtor pays the winner whatever the judge or jury decides the damages are, and everyone moves on. Unfortunately, it is often more complex than that. Just because there is a judgment doesn’t mean that the debtor will pay the cash they owe. Moreover, it is up to the winner to collect their judgment. There is a process that the creditor will go through, often with the help of a collections attorney who understands the ins and outs of the process.
- Appeal: The debtor has the right to appeal within a certain period of time after the judgment. However, unless the debtor bonds the amount of the judgment during the pendency of the appeal, the judgment creditor can usually immediately start enforcing their judgment, even while the appeal is still pending.
- Getting lien rights: The judgment creditor should always do whatever they can to change their status from unsecured creditor to secured creditor. This means placing liens on the debtor’s assets. Filing a UCC lien with the Secretary of State. Obtaining lien rights through the issuance and service of a judgment debtor examination. And placing real property liens on the debtor’s interests. The debtor must first pay the lien holders before selling or refinancing the property.
- Ask them for the money: They try to avoid paying, but explaining the situation and asking them for the money can sometimes yield results. There are rules involving harassment and intimidation, so it is best to rely on legal leverage.
- Find their assets: Some debtors have a variety of assets, or they may try to hide them, but a collection attorney can conduct a debtor’s exam, which enables the creditor’s attorney to ask the debtor about their assets. If they don’t provide satisfactory answers, the attorney can start digging. Private investigators and third-party subpoenas are powerful tools.
- Easy to find assets: Bank accounts (even hidden ones) are often easy to track down. It also may be a matter of garnishing a business’s income and accounts receivables.
- Use an attorney: People assume that a collection agency handles all debt collections, but the legal leverage applied in the steps above is overseen by a collections attorney specializing in this kind of work. They can exercise all legal tactics for collecting the money, often getting better and faster results than a traditional agency.
As you can see, a court’s ruling is not always the end of the road. Certain tactics or collections tools may work better than others for your unique circumstances.