Judgment enforcement is the process of ensuring that a civil court decision is implemented properly. When there is a monetary award involved, enforcement translates into collecting the money. It is possible to handle entirely in-house if the winning party chooses to do so.
The winning party is known as the judgment creditor; the losing party is the judgment debtor. It’s up to the creditor to work with the debtor to get the matter settled. If they cannot work things out, the judgment creditor has access to additional legal tools, including wage garnishment, judgment liens, bank account levies, and property seizure.
Ideally, it’s best when money judgments don’t get to the point of pursuing additional legal action. It’s better when creditor and debtor can work things out amicably. To that end, here are the five basic steps of in-house judgment enforcement.
Step #1: Contact the Debtor
The first step is to contact the debtor and request payment. Judgment Collectors, a Utah collection specialist that only handles judgment enforcement cases, recommends formal contact through a letter. Sending the letter via certified mail is best. The letter should include:
- Payment Forms – Creditors should list all the forms of payment they are willing to accept. This includes credit cards, checks, cash, etc. The more options available, the more likely the debtor will be able to pay.
- Forms of Communication – Creditors should also make clear how they prefer to communicate. The best option is in writing, via certified letter. Letters produce a paper trail that could prove valuable down the road.
The initial letter should be sent to the debtor unless otherwise directed by the court. In some cases, a creditor might be instructed to communicate only with the debtor’s attorney.
Step #2: Request Immediate Payment
Next, the creditor should request immediate payment. The request can be in the initial letter or in follow-up correspondence. Either way, requesting immediate payment lets the debtor know that the creditor isn’t willing to forestall. That said, a creditor can make an offer that might motivate the debtor to pay right away:
- A lump sum with a built-in discount for immediate payment.
- A lump sum payment with both interest and penalties waived.
Giving a discount or waiving interest and penalties is a gesture of goodwill. Debtors tend to appreciate such gestures. They are less likely to be combative as a result.
Step #3: Prepare a Payment Plan
While awaiting the debtor’s response for immediate payment, a smart creditor will prepare a payment plan. Such a plan allows the debtor to make monthly installments until the debt is paid off. It is a good option when working with a debtor who is willing to pay but cannot afford to make a lump sum payment.
Step #4: Conduct an Asset Search
If the debtor refuses both the lump sum and payment plan options, a creditor has no other choice but to proceed to further legal action. In anticipation of that, a smart creditor will begin an asset search. The goal of the asset search is to learn everything possible about the debtor’s income, property, bank accounts and investments, business dealings, etc.
The information gleaned from an asset search dictates which legal tools the creditor will use to collect. The more high-value assets the debtor has, the more avenues for collection are available to the creditor.
Step #5: File an Acknowledgment of Satisfaction
Hopefully, all goes well, and the creditor gets paid. The creditor is required to file an acknowledgment of satisfaction with the court once the judgment is fully satisfied. That wraps up the case once and for all.
