Collecting on a Judgment: Making the Win “Worth It”

Congratulations! You have won your case.  But, was it worth it? 

Sadly, winning a case does not guarantee that the defendant will actually pay you what the court says they owe.  The fact is that some people simply do not have the money to pay you, or (out of spite, defiance, or some other reason) they choose to brush off the court’s order and refuse to pay.  This post presents a couple of options that are available to try and convert the “win” into money in your pocket.

Payment Plans

Depending on the size of the judgment, most people do not have that type of money laying around and may not physically be able to pay you all in one lump.  In fact, that could potentially be a reason why they would not pay you before you went through the effort of the lawsuit.  Often times, it is worth it to contact the defendant and offer to work out a payment plan with them. 

Such voluntary payments are by far the cheapest way to start getting your money.  But the downsides are that you do not get all your money at once, and you have the time/internal costs of administering the payment plan.  Sometimes, your attorney’s office may already have the infrastructure in place to help you in managing such monthly payments.  If you decide to offer a payment plan, it is important to have get the defendant to sign a well-drafted payment agreement that outlines the terms and the consequences if the defendant stops paying.

Driver License Suspension

In many states, including Nebraska, Iowa, and South Dakota, if a defendant does not pay your judgment within a certain amount of time you can request that their driver license be suspended until they do.  This option is mostly only available if the underlying judgment is related to a car accident.  In other words, if it is based on a contract dispute you likely will not have this option available to you.

The benefit of this option is that is a great way to incentivize the defendant to pay. Without much effort or cost, you can just sit back and wait for the defendant to call you when they want to have their license turned back on. The downside (aside from only being available in a limited number of cases) is that you may have to wait a long time. I have had plenty of cases where the defendant will finally call in a couple of years after the fact when they finally want their license turned back on (usually in response to being pulled over and ticketed).

Garnishment

If the defendant has money sitting in a bank, or if they have a job, you can submit for garnishment.  After submitting the appropriate paperwork to the court, you will either receive money directly from the defendant’s bank account, or you will receive money directly from the defendant’s employer taken directly out of the defendant’s paycheck. 

This sounds like a wonderful option, but there are costs associated with it.  Those cost can usually be added onto the amount you are getting from the defendant.  But, if you have had to resort to garnishment then they likely don’t have much money.  There is a cap on how much can be taken out of their wages, based on how much they earn.  That means you will get the money over a long period of time.  Also, you have to renew or refile for the garnishment periodically in order to keep it active.

General Execution

If the defendant has physical assets (like extra cars, a boat, etc.) you can submit for a general execution.  With executing on the judgment, after filing the appropriate paperwork with the court you will essentially send the sheriff to the defendant’s home to seize his assets.  Then, those assets can be sold to help satisfy your judgment.

The obvious downside is that the defendant actually has to have assets to seize.  Also, you cannot take everything they own – certain items are exempt.  There is also some added cost involved and the hassle of selling the assets.  However, if the defendant has assets, there can sometimes be the emotional win of embarrassing the defendant when the sheriff shows up at his house and starts seizing his stuff.

Lien on Property

When you get a judgment, that judgment will often attach itself as a lien to the defendant’s house or other real property.  In Nebraska, depending on which court your lawsuit was in, that might happen automatically or you may have to official register your judgment as a lien.  You will need to check with the jurisdiction where the property is located to know if additional steps are needed for the lien to attach.

The downside is that you might not see your money for years.  But, the upside is that if they ever go to try and sell that property they will be forced to satisfy your lien before the sale can go through (basically like how they have to pay off the existing mortgage when they sell it to someone else).

There are options to try and turn the emotional win of getting a judgment into cold hard cash.  If you have a judgment against someone, call the experienced attorneys in our Omaha, Sioux City, and Sioux Falls offices to discuss what option might give you the best chance of seeing the money that the court says you are owed.