HOW DO I COLLECT A JUDGMENT I WON IN SMALL CLAIMS COURT?

 

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Winning the lawsuit is not nearly half the battle.  The real work begins when you try to collect on the judgment.

You lent someone $3500 and they promised to pay you back over time.  They make several payments, then stop.  Promises to resume payments “when things get better” are followed by “radio silence” in response to your phone calls and texts.

 

Understandably frustrated by this sequence of events, you sue in small claims court — and you win.  You now have a judgment against the defaulting party.  But how do you collect the judgment?  You’ve read about garnishments, levies, bank freezes and the like.  But what does that all mean?

Here is a good article discussing 10 tips on how to get started collecting your judgment.

Winning a lawsuit is just the start.  Collecting on the money judgment is the hard part.  You may want to consult with professionals who focus exclusively on the collection of judgments.

ATTORNEY ADVERTISING — PAST RESULTS DO NOT GUARANTEE FUTURE OUTCOMES

We are a debt relief agency, we help people file for Bankruptcy under the Bankruptcy Code. This Blog is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney

WHAT IS A “DEBTOR’S EXAMINATION,” AND HOW DO I RESPOND TO ONE?

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Judgment Creditor’s Rights to Collect from Judgment Debtor

When a creditor sues a debtor and obtains a judgment for the unpaid debt, the creditor (now a “judgment creditor”) can enforce the judgment against the debtor (now a “judgment debtor”) by seizing, subject to certain exceptions and limitation, the debtor’s income and assets.

How Does a Judgment Creditor Learn of the Judgment Debtor’s Income and Assets?

In most states, a judgment creditor can examine a judgment debtor regarding the debtor’s income and assets.  The process is in most states called a “debtor’s examination.” The judgment creditor is looking to find income and assets that may not be exempt from creditor process.

What To Do if You’ve Received Notice of Debtor’s Examination?

Here are three things to remember if you’ve been subpoenaed to appear at a debtor’s examination:

  1. Failure to show up at the examination can result in citation for contempt and, in certain cases, jail time.  It is therefore important not to ignore a notice to appear at a debtor’s examination.  If the time specified is not convenient, try to work with counsel for the judgment creditor to find a mutually acceptable time.
  2. Your answers at the examination are under oath.  Lying under oath is perjury  and a crime punishable by jail time.
  3. If the collector finds income or assets not exempt from creditor process under law, the collector can and will obtain necessary court orders to seize that income and assets.

Conclusion

Some judgment creditors are relentless in their pursuit of judgment debtors.  The debtor’s examination is one more tool at their disposal.  Do not ignore a subpoena (or notice) compelling attendance at a debtor’s examination.

If you have an outstanding judgment against you, you may want to consider ways to minimize or eliminate the adverse consequences of the judgment creditor’s enforcement efforts.  Call or email for a free consultation to learn the full range of your options.

ATTORNEY ADVERTISING — PAST RESULTS DO NOT GUARANTEE FUTURE OUTCOMES

We are a debt relief agency, we help people file for Bankruptcy under the Bankruptcy Code. This Blog is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

 

My Car Was Repossessed; Can the Car Lender Come After Me for More?

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If you get behind on car loan payments, the lender will likely come after the car through a so-called “self-help” remedy called “repossession.”  Once the lender has your car, it will sell the car at auction.  The proceeds received at auction, minus the costs of repossession and sale, will be applied to your loan balance.

If the net amount received at auction is less than what you owe on the car loan, the lender will have a “deficiency claim” against you.  The lender will generally demand you pay the deficiency, and sue you to recover the deficiency claim if you don’t pay.

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If the lender does sue you to collect the deficiency claim, the lender must serve you with the complaint and a summons.  The complaint will set forth facts relating to the loan, the default in payment on the loan, the repossession, the auction, and the resulting deficiency.  The summons commands you to appear at a date and time certain to answer the complaint.  Failure to respond appropriately to the summons and complaint can lead to a default judgment against you.

Once the lender has a judgment for the deficiency claim, the lender can execute on the judgment.  Judgment executions can take many forms, but usually involve wage garnishments and levies on your bank accounts.  Wage garnishments and levies can put you in a position where you are unable to pay other creditors, leading to a downward spiral of potentially increasing intensity.  It is at this point that many consumers think of filing for bankruptcy protection.  Bankruptcy can eliminate deficiency claims and block garnishments and levies.

Send me an email if you would like additional written information on how bankruptcy can protect you against deficiency claims and garnishments.

ATTORNEY ADVERTISING — PAST RESULTS DO NOT GUARANTEE FUTURE OUTCOMES

We are a debt relief agency, we help people file for Bankruptcy under the Bankruptcy Code. This Blog is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

What Can I Do to Stop a Wage Garnishment?

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You work hard for your money and you are barely able to make ends meet. A creditor has obtained a judgment against you and has begun garnishing your wages. Money that you need for your kid’s dentists visits and other important purposes is being withdrawn from your pay before you even get it. What can you do to stop the garnishment?

There are generally 4 things one can do to stop a garnishment.

  1. Pay off the judgment in full in exchange for a written release and an acknowledgment by the creditor that the judgment has been fully satisfied. This option, although “neat and tidy,” may be unrealistic if you don’t have the money to satisfy the judgment.
  2. Negotiate a settlement or reduced amount and pay that in a lump sum or over time. This option may not be realistic because the creditor may have little or no incentive to negotiate a compromise with you. Remember, the best time to negotiate a reduced payoff amount is before the creditor gets a judgment.
  3. Quit your job so that there are no wages to garnish. This option may fall within the “cut off your nose to spite your face” category — a needlessly self-destructive over-reaction to the problem.
  4. You could file for bankruptcy protection, get a discharge of the underlying judgment, and stop the garnishment permanently. Bankruptcy is a big step and requires consideration of a lot of different factors that should be considered in consultation with a competent legal advisor.

If your wages are being garnished and you would like to explore your options, call my office at 914-385-1032 to schedule a free 30-minute consultation.

ATTORNEY ADVERTISING — PAST RESULTS DO NOT GUARANTEE FUTURE OUTCOMES

We are a debt relief agency, we help people file for Bankruptcy under the Bankruptcy Code. This Blog is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

WHY DO MY CREDITORS SUE ME FOR A JUDGMENT? I HAVE NO ASSETS.

debtA question often asked is why creditors insist on suing to collect unpaid debt even when the debtor has no assets to satisfy the resulting judgment.  I can think of at least two reasons.

First, a judgment is good for 20 years in New York.  That means that the creditor, or “judgment creditor” once a judgment has been entered, has 20 years from the entry of the judgment to collect (or “execute”) on the judgment.  Who knows what might happen in a span of time that long?  It’s entirely possible that the judgment debtor (the debtor after a judgment has been entered) may begin to assemble valuable assets through higher earnings power, significant gifts, an inheritance, the receipt of life insurance, or a judgment in favor of the judgment debtor.  Creditors can afford to think long-term and just because you are presently collection-proof does not mean that you always will be.

Second, you may not have assets, but you are likely to have a job (or in the future will get a job) that pays you wages that can be garnished periodically by the judgment creditor.  This collection process is called “income execution” in New York.  Again, creditors can take the long view and can afford to be patient as they collect methodically and periodically through garnishment.

In short, just because you don’t have any assets now does not mean creditors will go away.  You can make creditors go away by filing and successfully administering a bankruptcy case.

If you would like to discuss how bankruptcy might work for you fill out the form below, hit “Submit” and I will send you a free copy of my article “What Are the Advantages and Disadvantages of Filing for Bankruptcy Protection under Chapter 7 of the Bankruptcy Code?”

ATTORNEY ADVERTISING — PAST RESULTS DO NOT GUARANTEE FUTURE OUTCOMES