You won your lawsuit and now it’s time to be reimbursed. The execution of sentences requires a lot of time and money. If possible, you should try to reach an agreement with the debtor. Some debtors will never settle, and some are crooks. But if settling is an option, consider settling for 50% of what is owed. (It may cost you a lot to enforce on time.)
Unfortunately, most debtors will not actually settle (pay money). If they do not reach an agreement, you have to decide, are you going to carry out the sentence yourself? Or will you find a judgment enforcer? Judgment enforcers are easy to find, however most charge 50% because judgment enforcement is not easy or cheap. Some wish first to try to enforce their judgment themselves.
If you are going to enforce a sentence yourself, the most important thing to remember is to be courteous, patient, and use common sense. That way, if you make a mistake, it most likely won’t cost you too much.
There are laws about what you can and cannot do to enforce a sentence. Each state has its own laws. California has the California Code of Civil Procedure (CCP). CCPs for enforcement-related law start in the 700s.
There are many state and federal laws regarding debtor privacy. For example, you can’t hand out fliers telling neighbors how much money the debtor owes you.
Among the many laws are California’s Rosenthal laws (CCP 1788-1788.30 and 1812.xxx). At the federal level, there are FDCPA laws (Fair Debt Collection Practices Act), and GLB Laws (USC Section 1692, 6801-6809) and related laws.
You have to be careful and courteous when you communicate with your debtor. As an example, here is a portion of Rosenthal’s text that executors must send to debtors in their first written communication:
“The state Rosenthal Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act require that, except in unusual circumstances, collectors not contact you before 8 a.m. or after 9 p.m. .through the use of obscene language”.
“Collectors may not use false or misleading statements or call you at work if they know or have reason to know that you may not receive personal calls at work. For the most part, collectors may not tell anyone other than your attorney or spouse, about your debt.Collectors may contact another person to confirm your location or enforce a judgment.For more information about debt collection activities, you may contact the Federal Trade Commission at 1-877 -FTC-HELP or the FTC website.
Again, being courteous, patient, and using common sense will go a long way.
Does the debtor have assets? That is the most important question. If a debtor has no property (or cannot borrow or obtain property as a gift), the judgment cannot be enforced. Here are some warning signs that should make you think twice before rushing to spend time and money to enforce your sentence.
1) If the debtor has declared bankruptcy, hold everything until you are sure you can proceed.
2) Especially if the debtor is old, be careful; Disability, pension and social security funds cannot be seized.
3) If the debtor has no job or income.
4) If the debtor does not have assets such as cars or a house.
5) If the debtor has many other sentences against him.
6) If the debtor is a company that has ceased to operate.
7) If the debtor is in jail or abroad or dead.
Even if the debtor has some of the warning signs above, it doesn’t always mean they should give up. It simply means that you should think twice before trying to collect from your debtor now. Trials are good for a long time. Your bankruptcy attempt may not be successful. Maybe you can go after an older person’s estate.
If the economy improves, you may be able to go after the debtor later. What a Judgment Enforcer could do, if there are no assets, is to wait 6 months and check again.
If you think your debtor has or can get some assets to pay you, you can take the debtor and others to court to answer questions and provide copies of documents. This is called an examination order. This can be expensive, since you have to pay the court and pay a process server to personally serve each person who must appear in court.
The first examination is usually the debtor himself. Sometimes the debtor just doesn’t show up. Sometimes the court cares, sometimes it doesn’t. Sometimes the court will allow you to pay more for a debtor’s warrant. In some US counties, the sheriff will pick up a debtor and take him to jail. In most counties, the sheriff is too busy to enforce civil court orders.
Even if the debtor comes forward, sometimes the debtor lies. Sometimes, when demanding documents, the debtor says that the dog ate his homework. Most of the time, the judge only cares if the debtor answers the questions, not that his answers are the truth. The debtor can say that his social security number is 007-00-0000, and most judges will not make the debtor change his answer.
One defense against an indifferent debtor is that, in certain situations, you can examine third parties if you can show that they probably control or own (in some way) the debtor’s property. You may be able to have the debtor’s spouse, parents, children, business associates, customers, and/or landlord appear in court. That kind of “pressure” (nuisance factor) can cause the debtor to find the money to pay you.
In addition to “pressure” on the debtor through third-party examinations or the production of documents, you can find out where the debtor works, banks or where he keeps an asset.
The main concept of the execution of judgments is that the law does not allow the direct alienation of any of the debtor’s assets. He can’t take his property, but the sheriff can (if he fills out the correct paperwork and pays the fees).
If you find a job or a bank account, you can pay the court for a writ (leave to garnish/seize assets) and then pay the sheriff and possibly a process server to take (for example) 25% of your wages, or seize your bank account. You can only recover what is owed to you, no more.
If they own the property, you can register a bond. In the current economic climate, registering a link does not mean that you will get paid. If you own other assets, like an expensive car or television, you can pay the sheriff to sell them at auction.
Having the sheriff sixteen and selling the property has some drawbacks: it’s expensive, things don’t sell for full value at sheriff’s auctions, the debtor can claim a waiver. The property can be financed or leased, which reduces the chance that you will see money.
Each action to enforce a judgment costs money, and you must document what you spend on a court-supported form. In California, an MC-12 form is used.
Sometimes filing liens, taking people to court, or making a lien on the debtor’s assets can result in an immediate payment or settlement discussion. Sometimes the first lien pays your judgment in full.
Sometimes the debtor has no money. Maybe your family member or friend or credit card could help them pay. Sometimes simply starting an enforcement proceeding leads to a reward. With further court proceedings, you may be able to tax the wages of a debtor’s spouse.
The debtor can declare bankruptcy. Sometimes when you try to tax their wages, there is another tax before yours. Sometimes the debtor has nothing in their bank account or can contest their lien.
Some sentence executions are quick, others take many years. Clearance offers may appear at any time. This is just a summary of the compliance issues. Your local court, especially a small claims court, has information and maybe workshops. There are many books and websites to learn more.