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Collecting a court judgment is often harder than winning the case itself. In fact, studies show that over 80% of small claims court judgments go unpaid by the debtor. Small claims court debt collection is a legal right but many people are unsure how to actually enforce that right once they’ve won. Without action, a judgment is just a piece of paper.
This blog walks you through every key step of collecting a judgment from confirming its final, to enforcing with wage garnishments or liens, and renewing when necessary. If you’ve struggled to get paid or feel stuck, this guide is a must-read to help you collect what you’re legally owed, the right way.
Before you begin any small claims court debt collection efforts, it is essential to ensure that your judgment is final and enforceable. Winning in court is only the first step without a final judgment, you cannot legally pursue collection actions such as wage garnishment, property liens, or bank levies.
In most U.S. jurisdictions, a small claims court judgment becomes final 30 days after the court issues and mails the Notice of Entry of Judgment. This waiting period exists to give the debtor time to file:
During this 30-day window, no enforcement action should be taken. If you move too quickly and the debtor files an appeal or motion, the court may block your collection efforts and possibly penalize you for acting prematurely.
To confirm that your judgment is final:
In states like California and Massachusetts, small claims court debt collection efforts can only begin after this finalization period. Acting early could result in your collection action being voided or delayed.
Courts do not collect money for you. As the judgment creditor, it's your responsibility to enforce collection. But doing so without a final judgment wastes time and may expose you to legal challenges.
Once you're certain the judgment is final and enforceable, your next move should be reaching out directly to the debtor before turning to legal enforcement.
Must Read: Responding to a Summons from a Debt Collector
In small claims court debt collection, initiating direct contact with the debtor can be a practical and often effective first step toward recovering the judgment amount. Courts generally encourage informal resolution before more aggressive enforcement methods are used.
After the judgment becomes final, send a formal written notice to the debtor requesting payment. This letter should include:
Use certified mail with a return receipt requested so you have proof the debtor received your letter. This can be important if you later need to show the court that you made a good-faith effort to collect amicably.
While you are legally entitled to the full amount, offering a payment plan or even a slight discount for prompt, lump-sum payment may lead to faster resolution. For example, if you’re owed $1,000, offering to accept $850 in a single payment within 14 days could appeal to a debtor looking to avoid further legal action or costs.
Avoid threats or hostile language. If your communications are perceived as harassment, you may violate state debt collection laws or the federal Fair Debt Collection Practices Act (FDCPA), even though you're a private individual and not a collection agency. Keep all contact professional and business-like.
Keep detailed records of all attempts to contact the debtor, including:
This documentation could be vital if you later seek court approval for enforcement actions like garnishment or property liens.
After sending the initial demand, give the debtor a reasonable time frame, usually two weeks, to respond or make payment. If there's no reply, you can proceed to more formal methods of enforcing your small claims court debt collection.
Once you've made an attempt at direct communication, the next logical step is to gather information about the debtor’s assets to determine how best to proceed.
Also Read: Why Are Debt Collectors Calling Me? Know Your Rights & Steps
Once you've confirmed that the judgment is final and the debtor has not voluntarily paid, the next critical step in small claims court debt collection is to investigate the debtor's assets. This process involves identifying the debtor's income sources, bank accounts, and property to determine the most effective method for enforcing the judgment.
An information subpoena is a legal tool that compels the debtor or third parties (such as employers, banks, or landlords) to disclose information about the debtor's assets. This can include details about bank accounts, employment, and property ownership.
In New York, for instance, the court provides a standard information subpoena form for a nominal fee. Once served, the recipient is legally obligated to respond, providing you with valuable information to pursue further collection actions.
A debtor's examination is a court-ordered hearing where the debtor is required to testify under oath about their financial situation. This includes disclosing assets, income, and liabilities. If the debtor fails to attend, the court may issue a bench warrant for their arrest. This examination can be a powerful tool to uncover hidden assets and compel the debtor to comply with the judgment.
Obtaining the debtor's credit report can provide insights into their financial status, including outstanding debts, credit accounts, and public records like bankruptcies or judgments. While accessing a credit report typically requires the debtor's consent, some jurisdictions may allow creditors to obtain this information with a certified copy of the judgment. This can help identify potential sources for collection.
Conducting searches through public records can reveal information about the debtor's assets:
These records can help locate real property or valuable assets that may be subject to liens or seizure.
Debtors may inadvertently disclose information about their assets or employment through social media platforms or other online sources. Conducting a thorough online search can uncover details about the debtor's lifestyle, employment, or business activities that may aid in locating assets.
It's crucial to ensure that all asset investigation methods comply with federal and state laws, including the Fair Debt Collection Practices Act (FDCPA). Avoid any actions that could be construed as harassment or invasion of privacy. If you're uncertain about the legality of certain investigative actions, consult with a legal professional to ensure compliance and protect your interests
Once you've gathered sufficient information about the debtor's assets, you can proceed with enforcement actions such as wage garnishment, bank levies, or property liens.
Also Read: Using the Fair Debt Collection Practices Act in Demand Letters
The most common enforcement tools used in small claims court debt collection are wage garnishment, bank levies, property liens, and asset seizure. Each method has specific procedures, paperwork, and state-by-state legal requirements.
Wage garnishment allows you to collect directly from the debtor’s paycheck. Typically, you’ll need to file a Writ of Execution and a Garnishment Order with the court. These are then served on the debtor's employer.
This involves freezing and withdrawing funds from the debtor’s bank account.
Filing a lien allows you to claim an interest in the debtor’s real property (e.g., home or land). This won’t give you immediate payment, but it can block the debtor from selling or refinancing the property until the debt is paid.
This method allows you to seize and sell the debtor’s personal property. This includes vehicles, valuable equipment, or even cash in a business register.
Each method requires you to:
It's critical to follow the specific procedures in your state. For example, in California, you must use the Judicial Council forms and have the sheriff serve them, while in New York City small claims court, enforcement steps must comply with Civil Practice Law and Rules (CPLR) Article 52.
Debtors may file a Claim of Exemption if they believe the asset or funds you’re targeting are protected by law. If this happens, a court hearing will usually be set to determine if the exemption applies. Common exemptions include:
Each method requires filing specific court documents and may involve fees. It's essential to follow the legal procedures carefully to ensure the collection is lawful.
After employing enforcement tools, the next step is to ensure your ability to collect remains intact by renewing the judgment before it expires.
Also Read: Understanding Debt Collection and Enforcement Practices
Winning a case in small claims court is only half the battle; collecting the judgment can take years. If the debtor doesn’t pay voluntarily and has no reachable assets during the initial collection period, you may need to renew the judgment before it expires. Renewal ensures your legal right to collect remains active, which is a key part of long-term small claims court debt collection strategy.
Judgment duration depends on state law. Typically:
Each state has its own rules on when and how to renew, so check with your local small claims court or court clerk for the exact process.
To keep your small claims court debt collection efforts active past the original expiration date:
If your judgment expires and is not renewed, you lose the legal right to collect it, even if the debtor later becomes able to pay (e.g., inherits money, wins the lottery, or buys property). A timely renewal preserves your claim and your ability to use collection methods like wage garnishment or property liens for years to come.
Moreover, judgments often accrue interest commonly between 5% and 12% annually, depending on the state. Renewing extends this benefit, making it financially worthwhile to maintain the judgment until collection is possible.
Courts may reject late renewal filings, especially if you miss the deadline by even a few days. If you're uncertain about the timeline or paperwork, consider contacting the court clerk’s office for guidance or working with a debt collection attorney.
If the renewal process doesn’t lead to payment, seeking professional help can be the next logical step to ensure your efforts aren’t wasted.
Further Read: Exploring Differences Between First and Third Party Debt Collections
If your efforts to collect a judgment through small claims court debt collection methods have stalled, or the legal procedures feel too complex, professional help can be a practical next step. Collection agencies and attorneys are equipped with the tools, experience, and legal authority to pursue collection more aggressively, especially when the debtor is evasive or has hidden assets.
You may want to consider professional assistance if:
Debt collection agencies often work on a contingency basis, meaning they only get paid if they successfully recover money. Standard fees range from 25% to 50% of the amount collected, depending on the age of the debt and its complexity.
Collection agencies have access to credit reporting tools, skip tracing (to locate debtors), and can persistently pursue payment through lawful means. Some also handle legal filings for enforcement, especially if they work with in-house counsel or legal partners.
Shepherd Outsourcing Collections offers a specialized approach to small claims court debt collection. With a focus on ethical practices and client transparency, they help individuals and businesses recover outstanding judgments. Shepherd works with clients nationwide and provides tailored solutions, including:
Contact Shepherd Outsourcing Collections today to explore how their expert services can assist you in recovering the funds owed to you.
Small claims court debt collection typically involves methods such as wage garnishment, bank account levies, property liens, and asset seizure. Each method requires specific court orders like a Writ of Execution and may involve the assistance of court officers such as sheriffs or marshals for enforcement.
Yes, once a judgment is obtained, certain assets of the debtor can be seized without their consent. The court issues an order allowing a sheriff or constable to seize property, such as vehicles or valuable equipment, to satisfy the debt. However, the process must follow legal procedures and ensure that only non-exempt assets are targeted.
The timeline to enforce a judgment can vary depending on factors such as the debtor’s assets, the method of enforcement, and any state-specific regulations. Generally, if the debtor's assets are located quickly and a proper court order is issued, enforcement can take a few weeks to a few months.
If a debtor refuses to pay after a judgment is entered, the creditor has the right to use enforcement methods like garnishments, liens, or asset seizures. If these methods fail, the creditor may seek additional legal assistance or professional help to continue collecting the owed amount.
Yes, in many states, a judgment can be renewed before it expires, allowing creditors to continue their efforts to collect. The renewal period varies by state, but it’s crucial to file the necessary paperwork before the expiration date to maintain the ability to use enforcement methods like garnishments or liens.
©2024 by Shepherd Outsourcing.