Can You Collect Your Judgment?
Before you sue, make sure your opponent is solvent and has assets you can grab.
Even after you win a lawsuit, you still have to collect the money you were awarded: your judgment. And the court won't collect it for you -- when it comes to collecting what you're owed, you're on your own.
Collecting from solvent individuals or businesses isn't usually a problem, because most will routinely pay any judgments entered against them. If they don't, there are a number of legal ways to force them to pay.
Unfortunately, some people and businesses sued in court are either broke (lawyers say "judgment proof") or so adept at hiding their assets that collecting your winnings is likely to prove impossible.
Protected Property
When a deadbeat debtor won't pay voluntarily, collecting your judgment can be difficult. Debtor protection laws keep you from seizing and selling many types of property, including the food from the debtor's table, the clothing from her closet, and the TV from her living room.
Vehicle Protections
In many states it will even be impossible to seize and sell her car, because a debtor's motor vehicle is protected from being sold to satisfy a debt if the amount of equity in the vehicle is below a certain amount (often about $2,000). And if the vehicle is used as a part of the debtor's business (is a tool of her trade), you probably won't be able to grab and sell it, even if the debtor's equity is higher.
Bankrupt Debtors
If a person or a business declares bankruptcy under Chapter 7 of the Federal Bankruptcy Act and lists you as a creditor, your right to recover a small claims court judgment is cut off, along with most of his other debts. (If your judgment was based on a secured loan, however, you do have the right to recover the property pledged as security.) One big exception to this general rule exists if your judgment was obtained because you or your property were injured by the malicious behavior of the defendant: In this situation, your right to collect your judgment should survive the bankruptcy (but you may need to intervene in the bankruptcy proceeding). An example of malicious behavior would be someone getting drunk and then attacking and injuring you.
Garnishing Wages
If a person fails to pay a judgment voluntarily, the easiest way to collect is to garnish up to 25% of his wages. (The wages of very low income workers, however, are exempt from garnishment.) But you can't garnish a welfare, Social Security, unemployment, pension, or disability check.For more information, see Collect Your Court Judgment With a Wage Garnishment.
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