More than one judgment creditor has been overwhelmed by all the options for collection. Between wage garnishment, property liens, wits of execution and more, it can be difficult to know what to do. So why are things so complex? Why are there so many options?
State laws allow for multiple collection options due to the sheer number of circumstances that could apply to a case. No two money judgments are exactly alike. No two debtors are in the exact same financial positions. Income, assets, and property ownership differ from one debtor to the next.
As a collection agency that specializes in judgments, it is our job to know all the options available at any given time. How we proceed on behalf of a client is totally dependent on the circumstances of the case. Quite frankly, there may be multiple options with which we can work.
A Reasonable Means to Pay
One of the first things a judgment creditor needs to be concerned about is whether the debtor actually has a reasonable means to pay. ‘Reasonable’ is a matter of opinion to a certain degree, but the fact remains that there are those debtors who realistically do not have the money. They also do not have any assets.
Debtors with little income, no assets, and no prospects for the immediate future are referred to as being ‘judgment proof’. They are the most difficult debtors to collect from. Fortunately, being judgment proof today does not necessarily guarantee being judgment proof a year from now.
Debtor circumstances can change. In fact, they are likely to. So there may be opportunities to begin collection efforts a year or two down the road. That is when a judgment creditor needs to go back and look at the available options.
Income and Bank Accounts
One of the options allowed in most states is garnishment. Garnishment can be employed in any of the following three ways, provided state law allows for it:
- Wages – A debtor’s wages can be garnished for payment. The creditor is allowed to take a certain portion of the debtor’s disposable income.
- Bank Accounts – Some states allow a debtor’s bank account to be garnished. All or a certain amount from the account would be seized and forwarded to the creditor for payment.
- Debt – In some cases, the debtor’s death can be garnished. Imagine a small business owner with unpaid invoices from his own customers. Payments related to those invoices can be garnished.
Note that all of this is governed by state law. And because each state addresses garnishment differently, there is no way for us to make a black-and-white statement pertaining to garnishment in every state.
Other Means of Collection
Garnishment is just one tool available to your typical judgment creditor. Property liens are another tool, as are writs of execution. But before judgment liens and writs of execution can be pursued, a creditor needs to know what types of assets the debtor owns. That differs from one debtor to the next.
One of the things we do on behalf of our clients is conduct regular asset searches. We look for all sorts of nonexempt property including vacation homes, investment properties, boats and RVs, jewelry and collectibles, and so on.
Perhaps you have noticed this post has been short on details and long on generalizations. There is a good reason for that. Every case is so different that trying to nail things down with details is impossible. That is why there are so many options. And that’s why so many clients turn their cases over to Judgment Collectors.