I wonder how many creditors sue debtors with the expectation of winning a money judgment and then getting paid quickly thereafter. My wondering is partly rooted in the reality that things rarely ever happen as quickly as creditors expect. In fact, collecting a judgment could easily turn into a multi-year project.
I am guessing you are surprised, especially if you know little about civil judgments and monetary awards. Do a little research. You might be surprised by just how complicated collecting a money judgment actually is. As for why the collection could turn into a multi-year project, let us talk about that.
Courts Work Slowly
Civil courts are not known for their speed. Indeed, the wheels of justice move slowly in both criminal and civil cases. They move so slowly that just getting to the point of collection can take a significant amount of time.
The first task is to actually win a lawsuit. That could take months or years. Assuming you do win and receive a money award as a result, you now need to embark on the long and arduous path that is collection.
That path typically includes a delay before collection efforts can begin. The delay can be anywhere from 15-30 days depending on state law. Why the delay? To give the debtor an opportunity to appeal. Most states don’t allow judgment creditors to do anything until after the appeal period is over.
You Need Information
Judgment creditors have multiple options for collection. Before they can choose an option, they need information. Judgment Collectors, a Utah collection agency specializing in money judgments, explains that creditors need to know the following debtor information:
- Address and contact information
- Employment status and weekly income
- Current debt load
- Cash and banked assets
- Real property and other assets
A judgment creditor literally has to know exactly what the debtor owns and what his current income and financial obligations are. This information determines how the creditor will proceed. But it takes time to get there.
Most states compel judgment debtors to furnish information through answers to written questions submitted by the creditor’s attorney. These questions and answers are known as interrogatories. But guess what? Interrogatories are subject to predetermined timelines. It can take weeks, or even months, to submit questions and get answers in return.
You May Need to Search for Assets
Even with interrogatories, there is a chance that you will not get complete and accurate information on the first try. Debtors have a habit of hiding their assets. You could ask for a motion to compel the debtor to appear in court where questions are answered under oath. In the meantime, you would probably want to begin searching for assets on your own.
Judgment Collectors say that asset searches can be conducted using a combination of public records and social media. When they run asset searches, they have the added advantage of access to proprietary databases. Regardless, information on assets is out there. You just need to dig for it. Once again, it takes time.
The Debtor May or May Not Cooperate
The icing on the proverbial cake is the debtor’s cooperation. A cooperative debtor might be willing to get things settled as quickly as possible. But most are uncooperative. And the more uncooperative a debtor is, the longer it takes to get paid.
Rare is the money judgment that is paid in full within months of the court case. More often than not, collecting is a multi-year project that is hindered by court delays, information gathering, asset searches, and debtors that do not really make an effort to participate.