Three Things To Avoid Doing When Collecting Your Court Judgment

Even though you may have prevailed in court and were awarded a monetary judgment, you still have to get the amount from the defendant. This typically isn't a problem if the defendant has auto insurance, as the insurer will usually cut a check for the amount fairly quickly. However, if the defendant is paying out of his or her pocket, you'll have to work with the person to get what's owed. Here are three things you want to avoid doing when collecting your court judgment.

Don't Rush to Collect

You may be tempted to send a demand letter right away to the defendant asking for your money, especially if you have outstanding bills that need to be paid. However, defendants have a certain amount of time to appeal the decisions in their cases. In California, for instance, people have between 30 and 180 days to file appeals, depending on the amount of the award or the case type.

Therefore, you want to wait until the time frame for an appeal passes before demanding your money. First, it will simply be a waste of time and effort if the defendant ends up appealing. Second, the act of collecting the debt may actually lead the defendant to consider appealing or taking other action to delay making a payment.

However, you don't want to wait too long. States typically restrict how long you have to collect a judgment. In Michigan, for example, plaintiffs have 10 years to collect on debts. If they fail to collect the money within this time frame, they will be barred from using any legal options (e.g. wage garnishment) to get their money. The statute of limitations for collecting debts varies by state, and you should research the rules in your area to ensure you're operating within the law and protect your ability to get your money.

Don't Be Inflexible

Another thing you want to avoid is being an all-or-nothing creditor when it comes to collecting the debt. If the defendant is paying out of his or her own pocket, chances are pretty good the person may not have the cash or assets to pay, especially if the award is in the hundreds of thousands or millions. If you push too hard about getting the money all at once, the defendant may throw his or her credit rating to the wind and file bankruptcy. Since most personal injury lawsuits are dischargeable in a chapter 7 bankruptcy, you may not get any money at all if that occurs.

Instead, be flexible about when you get your money. If the person doesn't have the cash all at once, work out a payment plan that fits both your needs. Just be sure to have a contract drawn up by an attorney stating the terms of the agreement (e.g. monthly payments, interest charged), so you both know what to expect. Also, you'll want to ensure the debt will be completely paid off before the statute of limitations for collecting court judgments ends, so you still have the option of taking legal action if the defendant defaults on the agreement.

Don't Violate Collection Laws

There are state and federal laws that regulate creditors' behavior towards debtors. For instance, creditors are not allowed to call debtors before 8 am or after 9 pm without the debtors' permission. Violating collection laws can land you in big legal trouble and may even result in you being sued by the debtor for up to $1,000 per violation.

To avoid unintentionally running afoul of collection laws, either research the applicable laws in your area or consult an attorney about the rules that may apply to your situation.

For more information about collecting court judgments or help getting money from a defendant debtor, contact a lawyer or go to websites like the one linked to in this sentence.