Workers Compensation Attorneys
America runs on debt — everyone owes money to someone else. If you are the person repaying the debt, it can be stressful and disheartening to part with your hard-earned money. In some cases, though, collecting a debt owed to you can be equally stressful and frustrating. Some debtors will not repay what they owe, which means you need to seek court intervention.
What happens after you go to court and win a civil judgment against the debtor? Is the problem solved? Unfortunately, not always. As the “judgment creditor,” it is still up to you to enforce the judgment and collect from the “judgment debtor.” Therefore, it’s important to understand your options.
Finding the Debtor’s Assets
Most creditors would prefer to be paid in a lump sum (or as close to a lump sum as possible). Assuming that the debtor doesn’t offer up the money owed voluntarily, you’ll need to learn what assets he or she has that could satisfy the debt.
After issuing the judgment, the court may require the debtor to fill out an asset disclosure statement to make the collections process easier (with the debtor risking a contempt of court charge if he fails to comply). If this step was not completed, however, you may be able to request that the court recall the debtor by issuing an order of examination. This is similar to an asset disclosure form but involves more of an interview process.
In terms of ease of collection, the assets creditors are often interested in include:
- Money in checking, savings, or investment accounts
- Money from an inheritance or trust (if the debtor is named as a beneficiary)
- Real estate (especially a secondary residence like a vacation home)
- Personal property
- Daily profits from a business (especially if the debtor is a business)
Payments Over Time: Wage Garnishment
In many cases, debtors may not have the money or equivalent assets to settle a debt all at once. Therefore, you’ll need to consider enforcing repayment over time. One of the most reliable methods is wage garnishment. You can petition the court to garnish the defendant’s wages, which would result in garnishment paperwork being sent to the debtor’s employer. Federal law caps garnishment at 25 percent of a debtor’s net earnings. Depending on the amount owed and the defendant’s compliance (or lack thereof) up to this point, the percentage may be lower, but it almost certainly cannot be higher than 25 percent for most civil judgments.
What if these steps don’t solve the problem? In the majority of cases, the methods above will be adequate to enforce a civil judgment against a debtor. Of course, some debtors are determined not to repay what they owe (or cannot afford to do so). If you find yourself in this unfortunate position, you may want to consult with an experienced business litigation attorney, like a business litigation attorney in Washington, DC, to determine if there are other enforcement options available to you.
Thanks to Brown Kiely LLP for their insight into how the debt collection process works after a civil judgment.