The methods of investigation are available to the parties to civil proceedings. Therefore, in order to benefit from the possibilities of using these devices at their full cost, the creditor must bring a civil action against the debtor. This may be the first action for annulment of the applicable judgment or an action for recovery of an existing judgment. This presentation discusses the process that a believer in judgment should follow to apply a judgment. First, let`s look at the two steps a judgement creditor should take before filing after judgment: avoiding safe creditors for judgment and determining the debtor`s bankruptcy potential. Next, we`ll look at how a judgment believer can use discovery to get a better idea of a debtor`s assets. Another presentation will focus on collection practices if necessary. While it feels good, winning your case in Small Claims Court is only half the battle. Then comes the collection of your judgment.
And since many small claims winners are shocked to find out, it`s not always easy to get the defendant to pay. The courts usually don`t interfere, which means it`s up to you to collect your hard-earned money. But don`t despair – you have a few effective options available. The court clerk renders the judgment shortly after the decision of the case, after which you become the creditor of the judgment and the defendant the debtor of the judgment. Most often, the court debtor has to pay the judgment as a lump sum, but sometimes a debtor will ask to pay it in several instalments. This request is usually granted, but you can contact the court to change the arbitral award if the debtor does not comply with the payments. One of the most important ways to recover from a debtor who does not pay a judgment is to seize his income. You can`t take more than a certain percentage of the debtor`s income under federal and state laws, and you can`t receive certain types of income, such as benefits from . B State. Therefore, the collection of the debtor`s income only makes sense if he earns a significant amount of non-exempt income. If a debtor files for bankruptcy under Chapter 7 (“Liquidation”) and the interest of the judgement creditor is included in the list of creditors created in bankruptcy proceedings (and the debt is not of the type exempt from discharge under the Bankruptcy Act), that debt is likely to be discharged. [2] In the event of chapter 7 bankruptcy, a debtor`s assets are liquidated (with some exceptions for exempt assets) and the liquidated assets are distributed to creditors.
Unsecured creditors such as credit card companies often receive extremely limited repayments in Chapter 7 proceedings, as people who are required to file for bankruptcy under Chapter 7 usually do so because they are in extreme financial difficulty. Debtors often cannot pay their debts, either because they are insolvent or because they have no assets to collect. This is what lawyers call evidence of verdict. Others are simply adept at hiding their assets. A phrase that is often heard in the legal field refers to debtors “judging”. This sentence describes a debtor who has a judgment against him, but who has no assets to pay for that judgment and who will not do so in the foreseeable future. For example, if someone owes $50,000 to a credit card company and the credit card company guarantees the judgments that are affected, but the debtor has no income or assets, that debtor may never have the practical ability to repay the debt. If there is no money to be recovered, it does not matter how much the debtor owes. Encourage the debtor to pay you voluntarilyIf you are too aggressive in collecting your judgment, the debtor can file for bankruptcy. This means that you will have to file a complaint with the Federal Bankruptcy Court.
Since small claims cost $7,500 or less, most debtors with small claims can make payments over time. Try to develop a payment plan with the debtor. Ask the court for helpIf the debtor doesn`t pay you, the court can also issue documents and other orders that allow you to: Read tips on how to recover your judgment for more information on how to begin the process of recovering the judgment. And for specific ways to get your judgment, read Ways to Collect from the Debtor. Another form of discovery is the application for admission, which are matters that (hopefully) lead a court debtor to admit the existence of certain facts. These requests help determine known or considered known facts and can simplify the investigation process. Once an approval has been granted, it is considered true and does not need to be proven in court, saving time and money in the collection process. Failure to respond to requests for authorization within a certain period of time constitutes automatic authorization. Therefore, a debtor must submit a timely response to such a request. Once the investigation process is complete and the creditor has made the decision to participate in debt collection activities, its different methods of doing so.
These will be addressed in another presentation. Once a judgment has been rendered, the court debtor may need to fill in information about its assets. They are likely to comply with this process, otherwise they will face significant sanctions. The assets that a believer in judgment wants to investigate include money, bank accounts, investments, inheritances, real estate, motor vehicles, works of art, jewelry, and commercial interests. If, shortly before the judgment, the judgement debtor transferred assets for a price below their market value, the judgment creditor could cancel that transfer as a fraudulent attempt to avoid confiscation. You can hire an expert to help you find assets if you suspect the receiver is trying to hide them. Here are some tips to help you get your judgment: Just because you won in a lawsuit doesn`t mean your job is done. Winning a trial is half the battle, and collecting a verdict can be as much a headache as an actual trial. Often, those who collect a verdict face a steep rise. Almost any dispute can be brought in small claims court, provided the amount of money requested is less than the maximum allowed by California law. The court will not collect the money for you. But the court will issue orders and other documents you may need to collect your judgment from the debtor (the party who owes you money).
Keep in mind that not all judgments are recoverable, as the debtor may not have income or valuable property. If you have a void cheque from the defendant, the back of that cheque must indicate the name and address of the bank where the receiver has an account. With this information, the enforcement agent can enter the money into the account and use it to fulfill your judgment. Before undertaking debt collection measures, it is in the interest of any judgement creditor to determine the likelihood that a debtor will file for bankruptcy if recovery efforts are made. Creditors should take the time to ensure (as much as possible) that a debtor does not file for bankruptcy. If you don`t want to settle for less and none of the other methods appeal to you, there is one last option. You can call a professional. A debt collection agency will sue the debtor and collect your judgment for you. However, you will have to pay a fee.
This means that you have to decide if their judgment is worth it. After the hearing, the court sends the plaintiff and defendant a “notice of judgment.” Read all the information printed on both sides of the notice of judgment. If you have won your case, the judgment will tell you the amount of money that was awarded to you, as well as the address and telephone number of the sheriff`s office, as well as the means of rendering your judgment. One way to get your money back is to call the defendant or send an email and ask for payment. The court cannot collect the money for you, and there is no guarantee that you will be paid your judgment voluntarily. If the defendant is not willing to pay, there is a recourse you can take to get your money. The Small Claims Court decision remains in effect for 20 years. Similarly, if the court debtor owns real estate, it can be sold to pay your judgment.
Ask the clerk of the Small Claims Court for a copy of the judgment, and then file it with the clerk of the county of the county where the debtor of the judgment owns property. You can then ask the enforcement officer to sell the property to pay for the verdict. Again, be aware that if the enforcement officer sells the property, you will only receive your payment for the proceeds if there is money left after paying the enforcement agent`s fees and expenses, if a mortgage is paid on the property, if all taxes are paid, and if previous debts owed by the court debtor are satisfied. These discovery processes are crucial because they lay the foundation for collection and give the creditor a better picture of a debtor`s finances. Once the creditor makes a disclosure and has a better idea of a creditor`s financial assets, a judgement creditor must use a collection method to enforce the judgment. Often, a better solution is to try to negotiate an agreement on the repayment of at least some of what is due, which is legally called agreement and satisfaction. [3] An agreement is an agreement between two parties to accept another form of compliance with an already existing legal obligation. Satisfaction is the fulfillment of this agreement. [4] In the area of debt collection, a judgement creditor may agree to accept an amount less than the amount due, rather than incurring costs in an attempt to collect a debt that could ultimately be settled in the event of bankruptcy […].