Most enforcement action can commence after a short waiting period to allow the debtor the opportunity to appeal or file motions. [1] Once the waiting period has expired you can begin enforcement action.  

   The more information you have about a debtor's possible assets, the more successful you will be at collecting your judgment. For instance, we are usually able to collect on judgments where clients have provided us with information about the debtors' assets and business, particularly the places in which the defendant does business, the location of bank accounts, copies of checks received from the debtor, people or companies for whom the debtor may work, or the identities of persons or companies which may owe the defendant money, etc.

   Below we discuss various options for proceeding once the judgment is in place:

   First- bank account garnishment. This is where we file a garnishment action with the court requiring the bank (the garnishee) to hold any monies that are located in deposit accounts for the named debtor(s). The garnishment is valid up until the return date listed on the summons, which is usually 45-90 days in the future. The bank is required to hold any funds contained in the account up and until the court date and not to exceed the full amount of the judgment (interest, costs and fees included). After the court date, the hold is released on the account. However if the funds held were not sufficient to satisfy your judgment, you may file additional garnishments. Please note that there is no limit on how many garnishments you can file and you can recover all the monies in the bank account up and until the full judgment amount.

   Useful tip: Always start with a bank garnishment if you have the information. If you have a Credit Application from the debtor which allows you to contact the bank for a reference, credit check, etc., then you will certainly want to do so after judgment to see if the bank will tell you whether any accounts are still open or if funds are available.   Sometimes banks are unwilling to provide this information. So please note that you may not know if any accounts exist until the garnishment action is filed and the bank files its required response with the court.

   Second- wage garnishment. If you have a personal guarantor or if your debtor is an individual then you can file a garnishment against his/her wages. Of course, you would first need to know where this individual is working. The wage garnishment differs from the bank garnishment in two (2) significant ways: 1) the wage garnishment is good for up to 180 days (this is longer than the bank garnishment) and 2) there is a limit on how much can be garnished from an individual's wages (usually a maximum of 25% of disposable earnings). This is important because if you have a fairly large judgment it will probably take you longer to collect since there is a limit on how much can be taken from the individual's wages.

  Third- garnishment of accounts receivable.   If you are aware of any monies owed to the debtor by anyone then a garnishment can be filed against those monies. This is especially useful if you have supplied labor or materials to a project for the debtor. It will be quite likely that the project owner or general contractor is now a potential garnishment candidate as they may still owe the debtor money. Keep in mind that you may also have friends in the business or belong to network groups that may have information about where the debtor is working. Please be sure to think about these things when you are in the process of obtaining the judgment, and certainly once the judgment is in place.

   Fourth- debtor's interrogatories. This is where the debtor is summoned to court, sworn in under oath and required to answer questions about their ability to pay the judgment and their assets, etc. Assuming the debtors are truthful (and actually appear), we usually have a good idea afterwards of whether the judgment is collectible. These interrogatories can only be conducted once every six (6) months for as long as the judgment is effective. Therefore, if a debtor's responses are not fruitful the first time around, you can always bring the debtor in at a later time to see if their financial situation has improved.

  Fifth- perfection of judgment lien on real estate. Once you obtain your judgment, you will want to make sure that it is recorded in the land records of the county where the debtor is located or has any property (called docketing). Docketing the judgment will place a lien on any real estate owned by the debtor in that county. If you are aware of property located in other counties, you will want to docket the judgment there also. You can docket the judgment in as many counties as you like. Depending upon the size of your judgment, you may want to file a suit to enforce your judgment lien which would force a sale of the property. Keep in mind that the judgment lien is superior only to liens filed subsequent to the docketed judgment. During the sale of the real property, all superior lien holders must be paid first (i.e., any mortgage lender, prior secured creditor, prior recorded judgment creditor, etc.). Therefore, the amount of your claim and the equity in the property will play a huge role in your decision whether to pursue a suit to enforce. Useful tip: You always want to docket the judgment. If there is a subsequent sale or foreclosure of property in a jurisdiction where your judgment is docketed, this may result in payment to you if there are monies available.

   Sixth- lien against personal property. You can execute a lien against a specific item(s) of personal property belonging to the judgment debtor. This can be a valuable tool if you are aware of a particular item belonging to the debtor which has some significant value. Please keep in mind that you will have to inform the Sheriff of the precise location of the property. You should be sure that this item does not already have a lien against it. Any prior lien will preclude a sale of the item. However, if the personal property is free and clear of liens, you will be able to direct the sheriff to ultimately sell the property.

   Seventh- lien against intangible personal property. This is a lien that is placed against something that you cannot put your hand on, but that the debtor is or will become entitled to in the future. For instance this type of lien can be used against future wages, bonds, notes, debts, etc. A notice is sent to a third-party informing them of the creditor's interest in the assets or future assets of the debtor. Once served with this notice, the third party must comply and forward any assets received on behalf of the debtor to the creditor. Useful tip: This is a great tool because it lasts for one (1) year.

  Please note that if you are not successful with any of the enforcement actions noted above, you can obtain an asset search on the debtor(s). Searches are sometimes helpful in locating possible employers or a probable bank account for a debtor. There are many companies that perform these types of searches. The costs for these services vary and usually range from a few hundred to a couple thousand dollars, depending on the search.

   We have found that the best success in collecting on a judgment is when the judgment is obtained relatively quickly (within 6 to 9 months of default). The longer you allow an account to remain in default, the greater chance that any judgment obtained will not be collectible. This is especially true where the debtor is a corporation that may have fallen on hard times or mismanaged its funds. In these types of situations most times there just are no assets from which to recover...they are just all gone!

   Please keep all these things in mind when beginning pursuit of an account. Remember to gather as much information as possible on the front end so that once the judgment is obtained you will be in a greater position to successfully enforce the same.

  Reading this article reminds me of the gratitude I have for all of our good customers.  Thank you!

  A special belated thanks to all those who serve or have served.  (Veterans Day)  Nothing like procastination!

Happy Thanksgiving!