One of the last steps in a legal recovery is judgment collection.
If your lawsuit goes to trial and you win in court, you will need to take on the last step of judgment collection. In some cases, winning the lawsuit is the easy part. It’s actually getting the check for the amount ordered by the court that’s the tricky part.
The following is a discussion on how to successfully collect a judgment award. Despite what this title says, there is no foolproof method. But there are some things you can do, look out for and keep in mind to have the best chances of making a complete legal recovery.
Sue a Defendant with Money
We’re not suggesting you should look at a lawsuit as a payday. However, it makes the common sense point that collecting a judgment is a lot easier when the defendant actually has money to collect. This usually occurs if the defendant is a large, successful company or has insurance coverage that will pay for any judgments against them. In most situations involving the collection of a legal judgment, the money will actually come from an insurance company. Even if the defendant is very wealthy, they will probably have an insurance policy that will cover most judgments from civil lawsuits.
Investigate the Defendant’s Assets
When the defendant is a public company, learning about their financial assets will be relatively easy. But with individuals or private companies, a special investigation may be necessary. In some states, special post-litigation discovery is possible. This will allow the party trying to collect a judgment to ask questions and request information that will provide critical details that then allow them to undertake collection activities, like garnishing a bank account.
Garnish a Bank Account
Garnishing a bank account refers to a creditor, such as the winner of a lawsuit, finding the defendant’s bank account and directly moving money from it. As you might expect, this will require special legal hoops that you’ll need to go through, such as getting a judge’s signature and notifying the bank ahead of time. After completing the necessary legal steps, garnishment is a very effective method of collecting a judgment. However, in many situations, the individual or company’s bank account will not have enough money to fully satisfy a judgment.
Keep the Judgment Active
Depending on the state, a judgment will eventually expire. After expiration, judgments are not as easy to collect. Luckily, renewing a judgment is relatively easy, although you might need the help of an attorney.
Don’t Let the Defendant Declare Bankruptcy
If the defendant can declare bankruptcy, there’s a good chance that you’ll never fully collect the entire judgment. The rules vary depending on the type of bankruptcy and who declares it, but in many cases, the winner of a civil lawsuit will be just like the many other creditors in a bankruptcy who are fighting to collect pennies on the dollar.
So what can you do to stop a defendant from declaring bankruptcy? Not much, unfortunately. But if you suspect a defendant you’re trying to collect from may declare bankruptcy, you might want to speed things up and act as if you’re up against a deadline.
Hire a Collection Attorney
Given the above, it’s easy to see how collecting money from a lawsuit isn’t always easy or straightforward. In some situations, the only way to collect a judgment will be to take certain legal action. This is where having a collection attorney can be very helpful. Yes, it will cost money to hire an attorney, but it’s better to get some money from a judgment rather than no money.
Schedule your complimentary consultation with the Wilbanks Law Firm, P.C. about judgment collection by calling [nap_phone id=”LOCAL-REGULAR-NUMBER-2″] now.