Collecting On Small Claims Court Judgment

An important thing for a person to do before suing in small claims court is to make sure that the potential defendant has the assets to actually pay any civil judgment the person might win. This is important because even if a person wins a judgment in small claims court, the court does not collect the judgment for the successful plaintiff. The plaintiff has to collect payment of the judgment. The court makes certain procedures available to help a plaintiff in that effort, but it is still up to the plaintiff to collect on their judgment.

There are several things to consider when deciding whether or not the defendant a person plans to sue has the assets to pay the judgment:

• In some states a person who wants to collect on a judgment cannot seize someone’s car if the car is worth less than $2000;
• A potential plaintiff should check to see if the defendant has a job or assets, e.g. personal property of value or real property;
• A judgment may not be collectable because of legal collection limits on welfare benefits, Social Security benefits, unemployment insurance, private pensions, and disability benefits;
• A potential plaintiff would want to know if the party they plan to sue is solvent and likely to pay voluntarily;
• If a business is involved, it might be possible for a person to collect from a cash register or even to seize equipment owned by the business;
• It would increase the likelihood of collecting on a judgment if the person to be sued has insurance that would pay the damages for which the defendant might be liable.

The person who files a lawsuit against another person is known as the “plaintiff” in legal terminology. The person sued is the “defendant.” Once the plaintiff has won a judgment against the defendant, the plaintiff becomes a “judgment creditor” and the defendant who has to pay the judgment is a “judgment debtor.”

What Is a Debtor Examination?

After winning a judgment, a person is probably going to be required to wait at least 30 days after receiving notice of their success to collect their money. This gives the defendant the opportunity to appeal the decision or make other legal moves. If the defendant does not appeal or make any other move, then the plaintiff can start with collection.

Of course it is always possible that the defendant will pay the judgment as ordered. In California, and probably in other states as well, if the defendant willingly pays the judgment, the judgment creditor must share this information with the court.

In small claims court, it is possible to force the debtor to answer questions about their assets, debts, and earnings. The goal of a debtor examination is to identify assets the debtor may have that can be reached to pay the judgment debt. A judgment creditor who wants to conduct a debtor examination should come prepared with a list of questions to ask the debtor.

This would include questions such as the following:

• A description of any real estate they own;
• Whether they are currently employed and where;
• Their Social Security number;
• Their driver’s license number;
• The location of the bank accounts and account numbers;
• Other types of income they may have, e.g. rental income or alimony;
• Whether they own stocks, bonds, or a business;
• Whether they have any insurance that might cover the judgment that has to be paid;
• What their debts are.

One thing to keep in mind is that a judgment debtor might be driven to file for bankruptcy if the judgment creditor seeks to seize the debtor’s assets to satisfy the judgment. That is why the judgment creditor would want to know whether the debtor has lots of other unpaid debts.

If the debtor does not appear for the debtor examination, the court can issue a warrant for the arrest of the debtor.

What Is a Writ of Attachment?

A writ of attachment or writ of execution is a tool used to take property from a judgment debtor, so it can be sold. The proceeds of the sale can then be used to pay the judgment. The process works as follows:

• Apply to the court for the writ, which tells the sheriff to pick up the debtor’s property and sell it;
• Serve, or deliver, the writ to the debtor. A plaintiff may have to use a process server and post a bond to protect the sheriff’s office from being sued if any mistakes are made, such as taking of the wrong property;
• Pay costs of any storage of the property that may be required;
• Collect payment after the sheriff completes the sale. The sheriff deducts the costs of seizing the property and conducting the sale out of sales proceeds before the money is paid to the judgment creditor.

The process can be complex, so a person may want to consult a lawyer, especially if real property is involved.

In some courts, a writ of attachment can be used before there is a trial and judgment. In this use of the procedure, the sheriff can actually seize and hold a defendant’s property after a lawsuit is filed but before the trial takes place. This is to assure that assets are available to satisfy the judgment if the trial ends in the plaintiff’s favor. A writ of attachment used in this way may or may not be available in small claims court. This would depend on the rules in the small claims court in the state where a person files their claim.

How Do I Collect a Small Claims Court Judgment?

If the other party cannot or will not pay the judgment, there are several options available to a judgment creditor.

If the judgment debtor does not voluntarily pay, the judgment creditor wants to make sure they have a written document from the court giving them permission to collect on this debt. Different courts may have different names for this document, calling it a “writ of execution”, “writ of garnishment”, or “writ of attachment”. While the name may vary, the effect is the same; it allows the judgment creditor to collect on their judgment.

Some options are as follows:

• Bank Levy: If a judgment creditor knows that the debtor has money, then a bank levy may be possible. A bank levy is simply an order from a court to seize part of a person’s bank account. Child support or tax payments cannot be seized and there may be other limitations as well;
• Installments: A judgment creditor can ask the court to require the debtor to make installment payments to them;
• Mechanic’s Lien: If the judgment creditor worked on a construction project for someone and did not get paid, they may be able to get their money through a mechanic’s lien;
• Property Lien: If the debtor has real property that has value, the court may give the judgment creditor a lien against this property. Unfortunately, the creditor would not actually receive their money until the real property is sold. But when that happens, the creditor could be paid;
• Wage Garnishment: This is probably one of the easiest ways to collect a debt. The creditor gets a court order to garnish the person’s wages. This is basically a way for the creditor to get paid over time by taking an amount (usually limited to 25%) of a person’s pay;
• Collection Agency. If a judgment creditor cannot find the debtor to collect the money, or cannot use one of the other options, they might turn it over to a debt collection agency. The agency takes a percentage of the amount it collects from the debtor, but it might be an option as a last resort. The problem is that small claims court judgments are often not very large, so losing a portion of it to a collection agency may not be an attractive option;
• Attach Personal Property: Personal property would include the debtor’s car, other personal property, such as jewelry and antiques, or bank accounts. If a creditor can find these types of assets, they may be able to get the property seized and sold in order to satisfy the judgment. However, as stated above, there are limits on what can be seized;
• Till Tap: Some states such as California allow a judgment creditor to ask the court for an order directing the sheriff to go to the debtor’s business and make the debtor pay the judgment from the proceeds of the business in the cash register at the time.

What Do I Do After I Collect the Judgment?

After a creditor has collected the money to satisfy their judgment from the debtor, it is their responsibility to file a Satisfaction of Judgment with the small claims court. This serves as proof that the judgment has been paid.

Do I Need a Lawyer to Collect on a Small Claims Court Judgment?

Some of the methods involved in getting payment of your judgment are rather complicated, such as getting a judgment lien issued or attaching personal property. An experienced debt collection lawyer can help you identify the procedures available in your local court and help you make use of them efficiently. A lawyer who specializes in collections can help make the entire process simpler and easier to understand.