You’ve won your car accident case. The court or jury has awarded you damages. You’re the winning party. The hard part is over, right? Not necessarily. Many people are under the belief that once a judgment is obtained, the losing party immediately writes a check to the winning party before even leaving the courthouse. Unfortunately, that isn't the way it works. Winning the lawsuit is often only half the battle. Now you have to collect it.
The time period within which you can expect payment of your damages depends on whether the obligation to pay arises out of a settlement agreement or as a result of a trial in court.
An settlement agreement is a pre-trial resolution of your car accident case. A settlement agreement can be reached at any time between the parties, but it generally occurs at some point before the beginning of a trial in court. It can even occur without a lawsuit ever being filed.
When an injury settlement agreement is reached, it will typically include a time period within which the settlement amount must be paid. Generally this time period is 20 or 30 days. Usually the settlement agreement also states that if the settlement is not paid within that time, then the collecting party has the right to add interest to the unpaid amount. The prospect of paying interest is a powerful financial incentive for the defendant to pay the amount on time.
The agreement might also state that in the event the settlement isn’t timely paid, then the collecting party has the right to back out of the settlement agreement and reinstate the lawsuit. Again, this is also a powerful incentive to comply with the agreement and pay the settlement.
In the case of a judgment, the time periods involved are usually of different lengths, and they are also governed by statutes or court rules in the state where the case was heard. The losing party in a lawsuit typically does not pay a judgment until certain post-judgment deadlines pass. For example, most court rules allow a losing party to file a motion for a new trial following an unsatisfactory outcome. The losing party usually has 10 or 15 days to do this, depending on the state, in which to file this motion. The court usually rules on this type of motion within a matter of weeks.
Even if the losing party does not file a motion for new trial, in most states the party can still file an appeal. Most states usually allow 30 or 60 days following the jury verdict within which to file an appeal. If the losing party is considering an appeal, they will understandably not want to pay the judgment until the appeal is resolved, and they probably won't be required to do so. The rules in most states provide that the losing party does not have to pay the judgment while the appeal is pending. An appeal can sometimes take as long as one or two years after the trial, and you would only get your judgment if the appeals court rules in your favor.
If your judgment involves an insurance claim arising out of a car accident, the other driver is usually named personally as the defendant. However, even though that driver’s name is on the lawsuit, the driver’s insurance company is usually the entity writing the check for the judgment. In that situation the collection of a judgment is a relatively smooth process.
This is because insurance companies, being experienced in the legal system, are well aware of the penalties that come with failing to pay a judgment on time. In that instance, you can typically expect a check for the judgment within 15 to 45 days of the court ruling. Again, this is assuming that the insurance company or losing party does not file a motion for new trial or does not appeal the court’s ruling. But it is a very rare occurrence when an insurance company does not timely pay a judgment.
In any situation involving any individual or corporate defendant who refuses to pay a judgment on time, there are a number of options available to you. These tools can be particularly useful where the losing party is ignoring the legal obligation to pay the judgment.
In most states, the process of using the legal system to collect a judgment is called “execution” on a judgment, and it can take many forms.
Garnishment is a popular method for collecting a judgment, and is available in all states. If the losing party is a corporation, a garnishment can be served on the bank where the company has accounts. If that occurs, the bank has an immediate legal obligation to take the judgment amount out of the bank accounts and deposit the funds with the court for payment to you.
If the losing party is an individual, in addition to garnishing that person’s bank accounts, you can also garnish the person’s wages. In that instance, the employer would take an amount out of the weekly wages, typically 25%, and send that money to you. The garnishment would continue until the judgment amount is paid in full.
Depending on the state in which you live, there are other types of judgment executions available to you, such as liens against real estate or execution on personal property. If you are the recipient of a settlement agreement or a judgment and you need to institute collection efforts, it is recommended that you seek the advice of a lawyer licensed in your state.