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A money judgment is a court ruling that a defendant owes a sum of money to a plaintiff. Rarely does the court provide collection assistance for the judgment creditor. Experience has it that most judgments expire uncollected and worthless, but it doesn't have to end up that way.

Collection requires the pro-active intervention of asset researchers, collection agencies, attorneys and private investigators. Often judgment creditors do not have the time or the resources to avail themselves of collection services. That is unfortunate because judgments on average have a life of 20 years!!! What's more, judgments accrue annual interest. Therefore, it pays to attempt collection in most, though perhaps not all, cases.

A plaintiff can take steps both prior to commencing a lawsuit and after judgment has been awarded that will greatly increase the odds of recovery.

PRE-JUDGEMENT MEASURES - When considering bringing action against an individual, a business or both, one potential to collect is relative to whether or not there are assets titled to the named defendants. A collector must ultimately see that bank accounts, payroll checks, real property or business inventory receipts match the name (and in some cases the tax id or social security number) of the potential judgment debtors.

It does little good to sue John or Mary Doe if they are "judgment proof". In other words, they have no assets in their names. Of course, you might sue in hope that John or Mary Doe will one day open a bank account or buy a house. However, the existence of a judgment against an entity makes it all the more unlikely that the entity will register future assets in his/her name. Paradoxically, in some cases, it makes sense to wait until the defendant acquires assets, keeping in mind the statute of limitations your state sets for bringing a lawsuit (in most cases six years).

For individual defendants, we suggest doing a nationwide real property search prior to filing a lawsuit. Even if the defendant currently has no liquid assets, a judgment in most states acts as a lien against the defendant's real property (many states require filing the judgment in the county where the property is located). This will often result in a future telephone call from the debtor’s attorney or a title company when the debtor seeks to sell the property. The title company will normally require that all judgments be satisfied and will seek to have you paid from the proceeds of the closing.

Businesses, with the exception of large corporations, are less likely to own real property. A bank search should be undertaken to see that the bank account title matches the name of the business. Every state permits businesses to operate under "dba's" or a fictitious name. A common business practice is to maintain deposit accounts in a "dba" for the very purpose of avoiding post judgment collections. Don't be surprised if a court prohibits collections against a bank account in the title of 'Jimmy Mack's Contracting' if your judgment reads against 'James Mack Home Improvements'.

POST JUDGMENT - You might think that winning a default judgment (a judgment granted by the court because the defendant failed to appear) is the most favorable outcome. Not at all! Generally, you want to do everything in your power to get the defendant to file an answer and appear. This is because you can receive the royal-run-around trying to collect a default judgment.

Once you attempt to levy assets based on a default judgment, the judgment debtor can usually stop you in your tracks by requesting another court appearances date. The defendant can simultaneously motion to vacate the judgment and for the release of any restrained assets. Be aware too that despite this, the defendant might have no intention of appearing at the newly scheduled hearing. In fact, the defendant may be inclined to repeat this tactic several times using every excuse in the book from inclement weather to infirmity to a death in the family until the court grants a "final" date.

In the meantime, assets are being depleted or transferred as you, the hapless creditor, are being worn down spending time and money in your quest. The can become a war of attrition and the best remedy may be to impress upon the defendant that you know everything about them by suing every name they might be inclined to hide behind. Their inclination to settle or answer will be directly proportional to their inability to deceive you.

If you locate assets in a state, other than where your judgment was granted, that state will treat your judgment as a "foreign" judgment. If your judgment also happens to be a default judgment, most states will not recognize it at all. You will have to sue the defendant again in the state where the assets are located. (Federal judgments don’t apply; lawsuits in excess of $100,000 are often brought in Federal court for this reason).

JUDGEMENT RECOVERY

Judgement Collection | Arizona Private Investigator