Collection Costs

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Using formal collection methods like wage garnishments and property liens to get a judgment debtor to cough up the money owed can be expensive. You will want to make the judgment debtor pay you back for these costs, if possible. You can be compensated for many–but not all–costs of collecting a judgment. Generally speaking, you can get your direct costs of collecting, which include costs like:

  • sheriff, marshal, or constable fees
  • costs to get copies of required court papers, like a writ of execution or abstract of judgment, and
  • fees to file a lien against a debtor's real estate.

However, generally you won't be able to get compensated for indirect costs such as:

  • babysitting costs
  • lost wages
  • transportation costs, or
  • postage or photocopying.

You are entitled to collect interest on your judgment according to your state's law. Interest begins to accrue on the date the judgment was entered. If the judge has entered a judgment to be paid in installments, you can charge interest only on installments that have become due, unless the judgment specifically says interest is to be earned earlier. Apply any payments you receive first toward interest and then to the unpaid balance of the judgment. You cannot claim interest on accrued unpaid interest.

by: Ralph Warner

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