Congratulations! You have won your case. But was it worth it?
The fact is that some people simply do not have the money to pay you, or (out of spite, defiance, or some other reason) they choose to brush off the court’s order and refuse to pay. But there are a couple of options that are available to try and convert the “win” into money.
Payment Plans
Depending on the size of the judgment, most people do not have that type of money laying around and may not physically be able to pay you all in one lump. Often times, it is worth it to contact the defendant and offer to work out a payment plan with them.
Such voluntary payments are by far the cheapest way to start getting your money. But the downsides are that you do not get all your money at once, and you have the time/internal costs of administering the payment plan. If you decide to offer a payment plan, it is important to have get the defendant to sign a well-drafted payment agreement that outlines the terms and the consequences if the defendant stops paying.
Garnishment
If the defendant has money sitting in a bank, or if they have a job, you can submit for garnishment. After submitting the appropriate paperwork to the court, you will either receive money directly from the defendant’s bank account, or you will receive money directly from the defendant’s employer taken directly out of the defendant’s paycheck.
This sounds like a wonderful option, but there are costs associated with it. Those costs can usually be added onto the amount you are getting from the defendant. But if you have had to resort to garnishment, they likely don’t have much money. There is a cap on how much can be taken out of their wages, based on how much they earn. That means you will get the money over a long period of time, so be sure to renew the garnishment to keep it active.
General Execution
If the defendant has physical assets, you can submit for a general execution or levy. With executing on the judgment, after filing the appropriate paperwork with the court, you will essentially send the sheriff to the defendant’s home to seize his assets. Then those assets can be sold to help satisfy your judgment.
The obvious downside is that the defendant actually has to have assets to seize. Also, you cannot take everything they own—certain items are exempt. However, if the defendant has assets, there can sometimes be the emotional win of embarrassing the defendant when the sheriff shows up at his house and starts seizing his stuff.
Lien on Property
When you get a judgment, that judgment will often attach itself as a lien to the defendant’s house or other real property. Depending on which state your lawsuit was in, that might happen automatically, or you may have to register your judgment as a lien. You will need to check with the jurisdiction where the property is located to know if additional steps are needed for the lien to attach.
The downside is that you might not see your money for years. But the upside is that if they ever go to try and sell that property, they will be forced to satisfy your lien before the sale can go through (basically like how they have to pay off the existing mortgage when they sell it to someone else).