Collecting your small claims judgment

Although it feels great, winning your case in small claims court is only half the battle. Next comes collecting your judgment. And as many small claims victors are shocked to discover, getting the defendant to pay up isn't always easy. The courts typically don't get involved, which means it's up to you to collect your hard-won money. But don't despair—you have a few effective options at your disposal.

Understanding debtors

Debtors often cannot pay their debts, either because they are insolvent or have no assets to collect. They are what lawyers call judgment proof. Others are simply adept at hiding their assets.

If you are dealing with the first situation, you may be able to work with the debtor if he or she is willing. The person's financial situation may be temporary. If so, you could work out a payment plan or make arrangements to have them pay in the future. If you are dealing with the second situation, you have some work to do.

You may even end up back in court. At that point, you have to decide whether it is worth your time to pursue your money.

How to get your money

If your debtor is unwilling to pay and you know they have the means, it's time to use your local sheriff. You have three options to collect a small claims judgment:

• A bank levy
• Wage garnishment
• A real estate lien

First, you must obtain proof from your small claims court that you have the right to collect. While the name of the court-issued document varies, it is typically called a writ of execution, writ of garnishment, or writ of attachment. Once you have your writ, give it to your local sheriff with instructions on your collection method. Your sheriff will serve papers on the appropriate institution and collect from your debtor.

Seizing money from your debtor's bank accounts is called a bank levy. For this, you need the name of the bank, the account number, and the exact name on the account. If the cause of your suit was a business transaction, you may have this information on a credit application. Debtor laws exempt certain accounts from collection. Those include wages, retirement funds, and public funds (social security, unemployment). The issue can get even more complicated if the account is joint or shared.

The next method to consider is a real estate lien. If the debtor has property, you can claim part of its value. You can create a lien by registering your judgment with the land records office in the county where the debtor owns real estate. A lien requires patience. You won't get any money until the property is sold or transferred since you will be paid from those proceeds. However, if the owner sells the property, you can collect the judgment, plus post-judgment costs and interests. It should be noted that some states limit the amount that can be collected on a real estate lien.

The third and easiest way to collect is wage garnishment. If the debtor has a job, you can collect up to 25% of his or her wages until the judgment is paid. Give your sheriff or other local official (known as a levying officer) information about the judgment and where the debtor works. This officer will collect the money and give it to you. There are restrictions, however. If the person can prove the money is being used for basic support, you can't garnish his or her wages. The same goes if they are already subject to another garnishment, are a federal or military employee or are on public support.

The simple approach to collecting

Sometimes, the simplest way to collect your money is to ask. Make the request in a professional manner. For some debtors, a formal request letter mentioning the judgment and the fact that it will show up on a credit report is enough of a threat to get them to pay. If the person is truly in a financial crisis, consider accepting a lower amount. Settling for less now, may save you time and countless headaches later.

If you don't want to settle for less and none of the other methods appeal to you, there is one final option. You can call a professional. A collection agency will keep track of the debtor and collect your judgment for you. However, you will have to pay a fee. That means you will have to decide whether getting your judgment is worth the expense.