Don't Sue Unless You Can Collect the Judgment
Before you sue, make sure your opponent is solvent so you can collect what you’re owed.
A court may decide in your favor, but it won't collect the judgment for you. So, before you sue, always ask yourself: Can I collect if I win? If you can't, think twice before filing a lawsuit.
Unfortunately, in a small but significant percentage of situations, people and businesses are broke (lawyers say "judgment proof"). Or, they're so good at hiding their assets that even if you sue and win, collecting your winnings is likely to prove impossible.
Ways to Collect Judgments
When an individual won't pay voluntarily, collecting your judgment can be difficult unless that person has:
- a job
- money in the bank, or
- real estate.
Garnishing Wages
When determining whether you'll be able to collect a judgment if you win, the first thing to investigate is whether the defendant has a job. If a person fails to pay a judgment voluntarily, the easiest way to collect in most states is to garnish up to 25% of his or her wages. (The wages of very low-income workers, however, are exempt from garnishment.)
You can't garnish a welfare, Social Security, unemployment, pension, or disability check. So if the person you want to sue gets all his or her income from one of those sources, you'll need to locate other non-exempt income or assets. Other common collection sources are real estate (except for equity in a personal residence, which may be protected by your state's homestead law), bank accounts, and stocks and bonds.
|
