Is it worth trying to enforce a court judgment against my home contractor?

The court says your contractor owes you money, but he's not paying it -- now what?

Question

After hiring a contractor to fix my garage roof for $2,000 and paying him the 50% upfront fee, he ran off with the money. I tried to reach out to him to see what happened, and then to negotiate some sort of settlement. He never responded.

I then sued him in small claims court. He never appeared. The judge granted me a default judgment in the amount of $1,000, but now I have to figure out how to make him pay. Is it worth it to chase him down for the money?

Answer

It can be extremely frustrating to win a lawsuit, only to realize that you still need to chase after the deadbeat contractor. Most established businesses will pay their judgments after losing in court, because they want to maintain favorable relationships with banks and lenders, and avoid one-star reviews on websites such as Yelp.

For some smaller businesses, sole proprietorships, or individuals, though, this isn’t always the case. Sometimes that’s because they simply don’t have the cash on hand to pay the judgment. Other times, it’s because they simply hope that you will be dissuaded by the difficulty and decide not to pursue them.

If your contractor finally picks up the phone or shows other signs of being responsive, you might try working out a payment plan, whereby the contractor agrees to pay the judgment over a series of months. (Here, maybe that’s $200/month for five months.) The contractor may appreciate this courtesy, and it might make the large judgment seem manageable.

If your contractor continues to be non-responsive – which sounds likely, given that he never appeared in court and never replied to your negotiation efforts – your calculus is more difficult.

You can return to your county clerk and ask about your state’s judgment-enforcement process. In most states, this involves either filling out a garnishment application or sending an informational subpoena to your contractor forcing him to disclose his assets. This will require at least one additional notice to your contractor that you are really intending to collect on your judgment; this alone might scare him into paying.

If the contractor still does not pay up, and assuming the court ultimately approves your request to garnish or “attach” certain bank accounts or property, you’ll likely need to retain a third-party collections company to pursue those assets.

Such companies typically charge fees – either flat fees, or a certain percentage of whatever they collect. This will be in addition to court fees (usually not too onerous) that you’ll pay for the filing of the garnishment application.

You should also consider your time and effort in filling out these documents and communicating with the court and the collections company. All of this is time-consuming. You’ll need to think carefully about whether the amount of your judgment is really worth all of that time and energy. In this example, for $1,000, you might answer that question in the negative. But if you have a judgment for $5,000, perhaps you might feel that the time and fees are worthwhile -- you might, after all, be ultimately successful.

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