Collecting on a small claims court judgment

Just because you have a small claims court judgment against someone doesn't mean you can automatically collect on it.

Once the court has ruled in your favor, it's best if you can make an arrangement with the person you've sued - now called the "judgment debtor" - for payments over time or some other method of payment. This is the least expensive method of collection, as collection procedures through the courts can be slower and costly. But, if you've contacted the debtor and still can't come to an agreement on how you'll be paid, the court may have procedures you can follow to collect the money owed to you.

In order to get paid as quickly as possible, you can find out what methods of collecting the judgment apply to your situation while you're waiting to find out whether the judgment debtor is going to appeal the judgment.

Court Order Regarding Periodic Payments

In some states, you can request that the court order the debtor to make specific regular payments on the debt. If the debtor falls behind on his payment schedule, he can be ordered back into court to explain it to the judge.

Judgment/Lien Recording

Ask the small claims court for instructions on how to record a judgment or "lien" against any real estate the debtor currently owns or may own in the future. This will prevent the debtor from selling his property without first paying your judgment.

If the debtor moves to another location, you can have the judgment lien transferred to the debtor's new location.

Debtor Examination

The small claims court will likely have a method of forcing the debtor to come back to court to answer your questions about his property, debts and earnings. Different courts call this a "supplemental examination," "debtor examination," "interrogatories" or "disclosure hearing." You will need to fill out paperwork with the court for an order to start this procedure.

Some useful information to get from the judgment debtor during the procedure would include:

  • A description of any real estate owned
  • Spouse's name and employment
  • Social security number
  • Driver's license number
  • Bank location and account numbers
  • Current employment (employer name and address, when and how often paid, salary amount)
  • Other income such as commissions, rental income, part-time employment, etc.

You can also question the debtor regarding property, such as stock, interest in a business, type and location of vehicles owned, etc. It's a good idea to round out the questioning with a general question such as "Do you have any property, personal effects, cash or other assets that you haven't yet mentioned? If so, explain."

If the debtor doesn't show up for the examination hearing, the court can issue a warrant for his arrest.

Writ of Attachment/Execution

You can ask the court to order the sheriff to pick up any personal property belonging to the debtor and then sell it to pay the judgment. This order - called a "writ of attachment" or "writ of execution" - must be served by a process server. You will probably have to post a bond to protect the sheriff's office from being sued in the event the property actually belongs to someone other than the debtor. You will also have to pay to have the property stored while the sheriff advertises for the sale of the item. These costs can be added to the total amount of the judgment and taken out of the money received from the sale of the property. If there is real estate involved, you'll probably want to consult with a lawyer, as the rules are complicated. Certain property - such as the house in which the debtor lives, any vehicle the debtor needs to get back and forth to work, welfare benefits and social security payments - can't be taken by the sheriff.

Writ of Garnishment

You can ask the court to order the debtor's employer to withhold a portion of the debtor's wages from his earnings each pay period to pay the judgment. The law limits the amount of money an employer can withhold and the type of income that can be withheld, so you may want to consult with a lawyer as to the rules in your state. The garnishment order must be served on the debtor's employer, who is then given a period of time to begin collecting.

You can also have the court order the debtor's bank to withhold funds deposited by the debtor for payment of the judgment. This is sometimes called "garnishing" or "levying" a bank account, and the paperwork must be served directly on the involved bank. Certain accounts, such as those held jointly with someone who is not a judgment debtor, are "exempt" from garnishment.

Till Tap

When the debtor is a business, some states (such as California) allow you to get an order authorizing the sheriff to go to the business and take enough money out of the cash register or receipts to pay the judgment.

Driver Licensing Notification

If your judgment resulted from a motor vehicle accident, you'll want to contact the Motor Vehicle Licensing Division of your state government. If the debtor was driving without valid insurance, some states will suspend his driver's license.

Bankruptcy If your judgment is listed as a debt in the debtor's bankruptcy proceeding, federal law prohibits you from trying to collect on the judgment. If you try to collect the judgment under those circumstances, you can be held in contempt by the federal bankruptcy court.

Satisfaction of Judgment

Once the judgment and costs of collecting the judgment are paid, you'll need to file a "Satisfaction of Judgment" with the court so that the judgment is no longer officially outstanding and the judgment debtor's credit record can be cleared.