Written by lawyers, edited to be simple to understand
Congratulations on winning your case! You are now “the judgment creditor” and you are lawfully entitled to collect on your judgment. The person who owes you the money is the judgment debtor. Swiftclaim will be releasing an “Enforce” feature in late 2021 that helps you to enforce your judgment. Until then, we’ve prepared a guide to assist you in collecting.
When can I collect?
The debtor has 30 days after entry of the original judgment before they have to pay you
The debtor has 30 days after the court mails or delivers your jurisdiction’s Notice of Entry of Judgment form before he or she has to pay you.
During this time, the debtor can:
- Voluntarily pay the judgment;
- Ask the court to order an installment payment plan;
- File an appeal (this is very rare); or
- Fill out and send you a Judgment Debtor’s Statement of Assets form available on your county court’s website.
If the debtor will voluntarily pay, how does it work?
The debtor can pay the judgment directly to the court
A debtor in a small claims case can pay the judgment directly to the court, if he or she prefers. Often this is done so that the debtor can immediately get proof of payment from the court in order to clear their credit record.
To pay the judgment to the court, the debtor must pay:
- The principal amount of the judgment;
- Costs after judgment;
- Interest accrued on the judgment; and
- The court’s processing fee (usually around $25, depending upon your jurisdiction).
The court (not the debtor) will let you know that that the judgment has been paid and tell you to:
- Complete the “Judgment Creditor’s Request for Funds” (a portion of a Request to Pay Judgment to Court form); and
- Claim the money by either mailing your completed request to the court or giving the form in person to the court clerk.
It is very important that the court has your current mailing address at all times. If within 3 years (jurisdictions may vary) the court is unable to reach you to tell you that it is holding payment of your judgment, the money becomes the property of the court. If you have questions about this payment, be sure to tell the court the case name, case number, and date of entry of judgment.
The debtor is required to send you a Judgment Debtor’s Statement of Assets form
A debtor who does not appeal or file a motion to vacate (cancel) the judgment (and that does not voluntarily pay the judgment) must fill out a Judgment Debtor’s Statement of Assets form and send it to you. In many counties the court clerk will mail this form to the debtor with the original judgment.
Unfortunately, many debtors do not fill out and deliver the form. If the debtor does not complete and send you this form (and he or she has not paid or appealed the judgment or asked for a payment plan), you can ask the court for sanctions against the debtor. Call the court and ask the clerk for help with this process.
If you do not receive this form and need information about the debtor’s assets to collect your judgment, you will have to do a debtor’s examination. Call the court and ask the clerk for instructions on how to do so.
The debtor can ask the court to let them pay the judgment in installments
The debtor will make the request using a Request to Make Payments form (which must include a Financial Statement form). The court clerk will mail a copy of the request to you.
You then have 10 days to tell the court that:
- You will accept the proposed payment schedule;
- You will accept payments in a different amount; OR
- You do not want to accept installment payments.
You can give the court this information and your reasons for your response using a Response to Request to Make Payments form or in a letter or Declaration form. If you do not respond within 10 days (jurisdictions may vary), the court may assume that you accept the proposed payment schedule and will grant the debtor’s request. If you do not accept the proposed payment schedule, the court will probably hold a hearing to discuss the request and your opposition.
This payment plan option affects the interest on the judgment as it may stop all interest from accruing until the judgment is paid off or the debtor fails to keep up with the payments. So if you have questions about how a payment plan can affect you, you might talk with a lawyer.
Note: If the debtor already got the court’s permission to pay you in installments (through a payment plan) and he or she has stopped paying you (or never paid you), you can ask the court to cancel the payment plan and make the full balance due right away. Call the court to ask the clerk how to cancel the payment plan so you can collect the full balance.
What if the debtor doesn’t want to pay?
This happens occasionally and you have options. Here’s some tips to collect if your debtor won’t pay on their judgment:
First, we want to make sure you don’t use illegal ways to collect your money.
The debtor may be protected from abusive or unfair ways to collect the debt. And generally, it’s not a good idea for you to use deceitful tactics to get the money the debtor owes you.
In your efforts to collect the debt:
- Don’t lie or make misleading statements to collect a debt;
- Don’t harass the debtor;
- Don’t ask another person for more than basic information about where the debtor is;
- Don’t tell the debtor’s employer or other people that the debtor owes you money (except when you get an earnings withholding order from the court);
- Don’t call the debtor before 8:00 a.m. or after 9:00 p.m. or at any time or place that is not convenient for the debtor;
- Don’t threaten to hurt the debtor or the debtor’s family, property ,or reputation; or
- Don’t suggest the debtor will face criminal charges (if no crime was committed) or that the debtor’s property will be taken (unless the law allows it and you intend to do it).
Second, encourage the debtor to pay you voluntarily
If you are too aggressive in collecting, the debtor may file for bankruptcy. This means you would have to file a claim in federal bankruptcy court, which no one wants to do. The good news is that most small claims debtors can make payments over time. Try to work out a payment plan with the debtor. Here are some tips to encourage the debtor to pay voluntarily:
Write a Letter
Write a letter to show the debtor it is in his or her best interest to pay the judgment as soon as possible.
In your letter, you can say that if the debtor does not pay:
- The amount the debtor owes will increase daily, since the judgment accumulates interest at the rate of 10 percent per year.
- You will seek reimbursement from the debtor of any reasonable and necessary costs of collection.
- Credit reporting agencies will know the debtor has not paid the judgment because the debtor’s name will appear on the court’s “Judgment Roll” which is a public record. The credit reporting bureaus go to each courthouse and get that information for their records.
- If the debtor does not pay, you can ask for:
- A wage garnishment against the debtor, and maybe the debtor’s spouse, or the debtor’s domestic partner;
- A levy on the debtor’s bank account or safe deposit box;
- Liens on real property (like a house or land) or personal property; and
- Suspension of the debtor’s professional license, like a real estate, contractor’s, or driver’s license in certain situations.
Help the debtor find assets to pay the judgment
Sometimes debtors honestly believe they do not have any way to pay this debt. Encourage your debtor to consider sources of assets like:
- Using an income tax refund;
- Taking a personal loan;
- Having a garage sale;
- Auctioning personal items on the Internet;
- Borrowing against a retirement account (401(k)); or
- Getting a credit card cash advance (but if you are the debtor, realize that this can result in high credit card fees).
Be Flexible About Payment Terms
Sometimes, being flexible will pay off.
Here are some ideas:
- Accept (weekly or monthly) payments.
- Accept less than what the court ordered.
- Let the debtor pay you with property or work instead of money.
- If the debtor is out of work, help the debtor find work.
Accept Installment Payments
If you decide to accept installment payments, write a letter to the debtor. Explain how you want the judgment to be paid. Include payment of interest and costs, if any.
Third, be organized
- Keep records of everything you do to collect the judgment.
- Make a copy of the judgment.
- Write down the debtor’s contact information and list of assets, unless the debtor sent you a Judgment Debtor’s Statement of Assets form, in which case you should find the assets listed there.
- Keep track of your expenses. Many collection expenses can be reimbursed (added to the judgment so you can collect them).
- To calculate interest on your judgment, keep a record of the date your judgment was entered. Usually this is the same date the court clerk mailed the proper Notice of Entry of Judgment form in your jurisdiction. Also keep track of the dates of any partial payments made by the debtor. If the debtor does make a partial payment by check, make sure to make a note of the location of the bank branch and the account number.
Fourth, ask a lawyer or collection agency for help
You can ask a lawyer or collection agency to help you collect your judgment. But you may have to pay a percentage of the judgment in fees (some agencies charge only 15 percent or 20 percent). They may also ask you to assign the right to your judgment to them. Usually, a lawyer or collection agency will write letters to the debtor. They can also help locate the debtor’s assets. You can also do these things yourself.
Fifth, make sure you renew your judgment
Money judgments automatically expire (run out) after a certain number of years (depending upon your state –see the chart below).
To prevent this from happening, you (as the judgment creditor) must file a request for renewal of the judgment with the court BEFORE the period runs out. If the judgment is not renewed, it will not be enforceable any longer and you will not be able to get your money. Once a judgment has been renewed, it is renewable for another period and then renewable after that.
When the judgment is renewed, the interest that has accrued will be added to the principal amount owing. From that point on, you are entitled to interest on the principal and the accrued interest.
For example:
- Let’s say you have a judgment for $6,000 and after nearly 10 years the debtor has not paid you anything. The judgment accrues daily interest of $1.64 ($6,000 x 10% = $600; $600÷ 365 days gives you the daily interest). You seek to renew the judgment after about 9 years and 10 months, or exactly 3,605 days. The accrued interest is $5,912.20 (3,605 days x $1.64).
- Once that is added to the original judgment, a renewed judgment of $11,912.20 can be entered. The interest will now accrue at a rate of $3.26/day ($11,912.20 x 10% = $1,191.22 ÷ 365 days).
To renew a judgment:
- Review the applicable law in your jurisdiction. A simple Internet search (“Renew my small claims judgment in X state”) will send you to the appropriate section of your state’s code of civil procedure.
- Find your jurisdiction’s Application for and Renewal of Judgment form and the Notice of Renewal of Judgment form. The Notice of Renewal of Judgment must be personally served on the debtor or served by first-class mail.
- Liens created at the time of the original judgment also must be renewed. This is because when you renew your judgment, the liens are no longer enforceable since the judgment the liens were based on is no longer enforceable.
- In order to extend a real property lien, you must record a certified copy of your jurisdictions’ Application for and Renewal of Judgment form with the county recorder in the county where the property subject to the lien is located.