Collecting on a Judgment Pitfalls
Negotiate with the Debtor
What do you know about the debtor? If you are uncertain he can pay the judgment in full, you have options. You may be able to reach an agreement to pay the debt out over time or to settle for less than the full amount. This method requires the debtor to be willing to discuss the matter, but in many cases, the debtor becomes a ghost, never to be seen again.
You can petition for a levy of the debtor’s bank accounts. A levy is sent directly to the bank and can capture whatever is in the account at that moment or over a set period. Of course, that means you must know the bank name and bank account number. Consequently if the debtor shares that account with someone else, you may face extra headaches in procuring your fair share. Another consideration is you have no guarantee there is money in the account to recover.
Real Estate Lien
A real estate lien places a claim against the debtor’s property; however, you have to wait until the debtor decides to sell the property to collect. Additionally, you may not be the only person to hold a claim. You may only get paid after the debtor’s mortgage holder and any other individuals or business who are collecting on a judgment.
You can petition the authorities to garnish the debtor’s wages, provided you know where he works. And as long as he stays at his job, you have a good chance collecting what is due you. Futhermore, many debtors have been known to quit instead of live in reduced wages. Do you really want to keep tabs on the debtor for the months if not years to get to get paid?
Sell the Judgment
Finally, if you do not know the debtor well enough to successfully levy, lien, or garnish payment, you have options. Consider selling the judgment to professionals who are better equipped to investigate deadbeats and to successfully collect the monies owed. While you will not receive the full value of your judgment, you will find resolution and be able to move on with fewer headaches and more money in your pocket.
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