Regular readers of our blog know full well that enforcing a judgment is a creditor’s responsibility. Courts rarely get involved in enforcement. As a result, creditors are not required by law to accept any particular type of payment or a payment in any amount. Creditors are free to accept payment as they see fit.
All a civil judgment does is render a decision in a civil case. It determines the winner and loser, as well as how much the loser must pay. Yet there are no built-in enforcement mechanisms that would allow a civil court to enforce a judgment in the same way a criminal court enforces a guilty verdict.
What does all this mean? In simple terms, you could win a civil judgment against a customer and then work with the customer to devise the most reasonable means for settling the debt between you. There are plenty of choices.
1. Payment Through Installments
Your first choice is to demand full payment but still accept it in installments. The debtor may respond by offering weekly, monthly, bi-monthly, or even quarterly payments. It would be up to you and the debtor to work out a payment schedule you could both live with.
Installment arrangements are pretty typical in the debt collection space. They are not necessarily the best option after a civil judgment simply because judgment debtors are not known for their cooperation. But when an amicable installment agreement can be worked out, the two parties would be foolish to not take advantage of it.
2. Lump Sum Payment
Although lump sum payments are not the norm with civil judgments, they also aren’t impossible. We have seen actual cases where debtors had the financial means to pay what they owed in a single payment. They just needed a little encouragement to do so. Encouraging payment is one of the things we do, by the way.
Affecting a lump sum payment can be easier when the creditor is willing to take a discounted amount. Maybe the creditor offers to knock 10% off the bill if the debtor is willing to pay the remainder immediately. Perhaps the debtor counters with 20% and the two end up meeting in the middle at 15%.
3. Wage and Bank Garnishment
There are cases in which debtors are willing to pay but truly do not have the financial resources to set up an installment plan. As an alternative, they willingly agree to wage and/or bank account garnishment. For the record, not all states allow garnishment. Those that do give creditors yet another opportunity to collect.
The difficulty with garnishment is that payment tends to be slow. It can take years for a creditor to fully collect on a sizable debt when garnishment is the only option. But compared to getting nothing at all, garnishment is doable.
4. Property Seizure
We have seen plenty of cases in which creditors were left no other option but to seize some of the debtor’s property and sell it. Property seizure tends to be an option of last resort. But when it is exercised, it does the job.
As a specialist judgment collection service, we know that even the threat of property seizure is often enough to motivate debtors to set up some other means of payment. No one wants to lose property. That’s why seizure, though an option of last resort, is often effective.
Creditors are free to accept payment in any way they see fit. Though it is not advised, a creditor could forgo cash in favor of services rendered – or anything else for that matter.