Judgment Collection Process

Winning a lawsuit results in getting a judgment.  But that alone does not guaranty you get paid.  It is simply a court ruling that says the debtor owes the money.  Now we have to collect.

Once the judge rules in your favor, you still don’t have a judgment.  The clerk of the court needs to issue the judgment.  This typically takes 2 to 4 weeks, but with governmental budget cuts, there have been a few occasions where this has taken 4 to 6 months.  Once the judgment is issued, it then needs to be recorded at the state level and also be recorded in any county where the debtor owns real estate.

In about 1/3 of the collectable lawsuits where we get a judgment, it results in the debtor agreeing to pay without having to do court ordered judgment collection procedures.  They may still negotiate the amount they pay or a payment plan.  Everything is negotiable.  Because the court ordered judgment collection effort can take a long time, has additional costs, and delays when money is received, ‘voluntary’ payments are preferred.

There are several approaches one can use via the courts to try to collect on a judgment.  Each one takes time and involves expenses.  We will review each one separately below.

Bank Levy or Garnishment

A bank levy or garnishment will be issued by the court upon request.  You need to know where the bank account is.  The levy typically should be served at the branch where the account is open, not just any branch of the bank.  The levy must be delivered by a court appointed organization, which typically is the local sheriff or marshal.  Unfortunately, this can mean long delays from the time the court issues the levy to the time it is served on the bank.  Our clients are entitled to any ‘available” funds on the day the levy is served at the bank.  The levy does not automatically get applied on subsequent days.  So, if you are fortunate and there is a lot of money in the account when the garnishment is served, then we will get a big payout.  But, if on that particular day there are minimal funds, we have to start the process all over again, which can take 3 or more months.  Also, if there is a lien on funds in the account by the bank or by the federal or state authority that has a tax lien, then the bank will not seize the funds for our bank levy.

Since this process can take so long, this is another reason why negotiating voluntary payments is often a preferred approach.

Wage Garnishments

Wage garnishments can be obtained against any individual who was named on the judgment (i.e. determined to have personal liability for the company’s debt to our client).  This requires the employer to garnish, or hold back, a portion of the employee’s wages and submit these funds to the court on a monthly basis to be paid to the judgment creditor.  You have to know where the person works in order for the garnishment order to be sent to the employer.  The debt collection attorney needs to go to court and request the garnishment, and after the court agrees the court has to issue the garnishment to the employer.  The law limits how much of an employee’s wages can be garnished, based on the concept that the employee needs a substantial portion of his wages simply to pay for food and lodging.

Attaching Debtor’s Revenue

If you know who the judgment debtor’s customers are, or where they receive their payment for products or services sold, then capturing the funds before they get to the judgment debtor may be the way to go.  This includes merchant (credit card) accounts.  One advantage to this is once the attachment order is served, it is on-going until the judgment is satisfied.  This can be a somewhat complicated and time consuming process, similar to getting a bank levy.  It should only be attempted if the creditor believes there is an on-going flow of funds through these different revenue sources.

Placing a Keeper in a Retail Location

If the judgment debtor has a retail outlet, a keeper can be placed in the store to do a “till tap”.  Essentially, this means taking any cash currency received out of the cash register. The keeper actually goes and stays in the store and take all cash that is paid that day.  This is an expensive process because the keeper gets paid hourly ($50 to $100 per hour) and may have to stay day after day to recoup money.  We can go back to the court and petition to have the cost of the keeper added to the judgment amount so there is a chance of recovering these costs.  Often once the keeper appears, the debtor will be contacting our attorney to try to work out a payment plan or settlement because they don’t like the idea of employees and customers seeing this person in their location and all their cash being seized.

Liens on Assets and Real Estate

A lien is effectively placed on real estate when the judgment is recorded in the county where the debtor-owned property is located.  If they try to sell or refinance the property, the judgment will come up during the record search.  They will not be able to complete the transaction without dealing with the judgment.  However, if there is no equity in the property it is unlikely the creditor will receive any proceeds. The debt collection attorney can also ask the court to force the sale of both real estate and other assets, such as inventory, furniture and fixtures.  This is not always easy to complete, and it can be an expensive process requiring the creditor to advance substantial funds ($2,000 or substantially more).  These costs do get added to the judgment and therefore can be recovered, but many clients hesitate to invest these amounts unless the probability of recovery is extremely high.

Debtor Exam To Find Assets

The key to doing court ordered judgment collection efforts is having information on the debtor’s assets and income.  If we don’t have that, then the first step in the process after getting a judgment is to conduct a debtor exam.  The debtor is to appear in court with their banking information as well as other information regarding their assets and income so we can get the information needed to do levies, garnishments, etc.

The debt collection attorney has to first schedule the exam with the court, which requires filing fees.   Then, the debtor has to be personally served with notice of the exam, whether they are an officer of the company debtor or an individual who has personal liability.  If we do not know where the debtor resides or works, then we cannot serve the debtor.  There is a charge (typically around $40 to $75) for each attempt by the process server to serve the debtor, so these costs can add up.  If we don’t serve the debtor within the necessary timeframe, then the exam needs to be rescheduled and we have to try to serve them for the new exam date, again incurring more costs. If the debtor appears in court but does not bring the required information, the exam is continued to another date.  This can happen several times, including if the debtor does not appear.  So, while we have the court on our side, the debtor can make the process difficult and stretch it out months if not years.

Arrest Warrants

If a debtor repeatedly fails to appear for debtor exams, we can request that the judge issue an arrest warrant.  Usually we only get a “bench warrant”, which means the local authorities do not go out to attempt an arrest.  Instead, if a person ever is questioned by an officer, for example during a traffic stop, the warrant will appear and off to jail they go.  Some jurisdictions will proactively seek to arrest the debtor.  There is no prison sentence, but the judge indicates they must appear or there could be additional consequences.


Given the difficulty of the judgment collection process, and the time it can take from the filing of the lawsuit to getting money, careful consideration must be given when contemplating litigation.  We carefully evaluate all the information we can compile to determine the likelihood of success not only in winning the lawsuit but in actually collecting.  The amount owed must justify the potential investment in out of pocket costs and retainers.  When we recommend suit be filed, we believe there is at least a 50% chance of actually collecting.  At the same time, we want our clients to be aware of the difficulties and time delays if we have to go the litigation route.  This should impact their decisions when payment plans and settlement offers are given both before litigation and after getting a judgment.  If a debtor is making it very difficult to collect the judgment, it may be worth agreeing to a reduced amount this is voluntarily paid instead of having to do the court ordered judgment collection process.

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