Generally, when you sue a business for an injury, either the company or its insurance provider will cut you a check for the court judgment soon after the case concludes. However, this isn't always the case if you sue an individual for injuries and losses resulting for a personal injury issue. Since many people aren't in a hurry to pay court judgments, especially ones involving thousands and thousands of dollars, you may have to be a little aggressive when pursuing money owed to you. Here are a few tips for collecting your court judgment.
Advise About the Consequences of Non-Payment
The first thing you should do is send the person a demand letter for payment. It's important to word the letter carefully to avoid breaking debt collection laws, scaring the person into hiding assets, and/or galvanizing the individual to file for bankruptcy. You should mention that you are prepared to take additional steps to collect the debt, though you don't want to tell the person specifically how you plan on collecting the money owed.
You should also mention that court judgments show up on a person's credit report. If the debtor cares about his or her credit score, then the person may send you a check right away to avoid damaging it. As additional impetus to pay quickly, you could offer to settle the debt for less than what's owed. For example, if the person owes you $3,000, you could offer a 10 percent discount if they pay in full within 30 days.
Include an address where the person can send the money and a phone number where the individual can contact you if he or she has questions or wants to arrange payment.
In this tough economy, the person may want to pay but may not have the entire amount up front. Even though you may have expenses you need to take care of, try to work out a payment arrangement that's beneficial to you both.
Before agreeing to a payment arrangement, though, it's a good idea to research the statute of limitations for collecting court judgment in your state. For instance, in Connecticut, you have 20 years to collect the debt. After that time period passes, you may be barred from using debt collection tactics such as wage garnishments to get the money. Therefore, you'll want to make sure any payment arrangements you accept will have the person paying off the debt before the statute of limitations ends.
You'll also want to have your personal injury attorney draw up a legally binding contract for the person to sign that protects you should the individual fail to make the payments as agreed.
Go for the Easy Assets
If the person doesn't respond to your request for payment or refuses to pay you at all, then your next step is to start taking collection action. It's a good idea to work with your attorney to do an asset check to determine what the person owns that you can either garnish or attach a lien to.
Since forcing a person to sell his or her house or car can be difficult, it's best to start with making a grab for easy assets. File a wage garnishment request with the person's employer. Depending on where you live, you can grab up to 25 percent of the individual's paycheck, and the order will remain in effect until the debt is paid off. You can also garnish the person's tax returns.
Another option is to garnish the person's checking account. You can do a one-time grab of the funds in the bank. Be aware, though, that certain types of funds such as Social Security and disability payments cannot be touched. Therefore, you'll want to hold onto the money you do get for a little while just in case the person files a counterclaim to get some of that cash back if it belongs in a protected category.
For people who don't have a source of income that can be garnished, you may have to file a lien against property the person owns. The person will not be able to sell that property until he or she pays off the debt and you remove the lien.
In most cases, these collection actions will be enough to get the debt paid. In other cases, you may have to take more aggressive steps. It's a good idea to enlist the help of your attorney in collecting your court judgment to ensure what you're doing is legal and to maximize the chances of success.