How Do I Collect on a Small Claims Judgment?
When you win your case in small claims court, the judge will issue a judgment against the other party for payment to you and for court costs. Now you must collect on that judgment, and it's not as easy as it sounds.
The losing party will likely be reluctant to pay, but you do have some options for collecting the money awarded to you.
It surprises many people to learn that winning a case doesn't mean that you automatically get paid. Many debtors don't pay because they can't, and some are difficult to locate to get payment.
How a Judgment Is Issued
If the judge in small claims court rules in your favor, or if a default judgment is issued because the defendant fails to appear or defend the case, the court will issue a judgment for a specific amount of money. This amount will include court costs as well as the amount the court has stipulated you be paid.
If the other party appeals the court's decision, they are required to put up an appeal bond, guaranteeing payment if the appeal is denied. This may help you get your money, but you will have to wait until the appeal is heard.
Appeal bonds are provided by surety insurance companies to give an assurance that if the judgment is affirmed by the court, the plaintiff (sometimes called an appellant) will be paid if the defendant (or appellee) can't pay.
Options for Getting Paid
If the other party does not voluntarily offer to pay you, you must decide how to proceed to get your payment. You will first need a written document from the court giving you permission to collect on this debt. This document might be called a writ of execution, writ of garnishment, or writ of attachment (it varies by court).
Then, with this document in hand, you can consider your options for collecting on that small claims judgment. The options below vary by state; some may not be available in your state:
- Bank Levy: If you know the person has money, you may be able to get a bank levy, which is an order from a court to seize part of someone's bank account. Child support or tax payments are protected from being seized.
- Installments: You can request the court to require that the other party make installment payments to you.
- Mechanic's Lien: If you did work on a construction project for someone and didn't get paid, you may be able to get a mechanic's lien to get your money.
- Property Lien: If the debtor has personal property that has value, the court may give you a lien against this property. If the debtor owns a house, you may be able to get a real estate lien against the property. Unfortunately, you can't get your money until the property is sold. If you wait long enough, you will get your money when the property is sold.
- Wage Garnishment: This is probably the easiest way to collect a debt. You may ask the court to garnish the person's wages. This is basically a way for you to get paid over time by taking an amount (usually limited to 25%) of a person's pay.
- Discuss with the Debtor: You can contact the other party and discuss payment, including payment terms. Sometimes this works out.
- Using a Collections Agency. If you can't find the person to collect the money, or you can't use one of the other options, you might want to turn over the debt to a collections agency. The agency will take a percentage of the amount paid to you, but it might be an option as a last resort.
Collecting a Judgment in Your State
Many states have specific procedures to follow to help individuals and companies collect small claims judgments. In California, for example, the debtor must give the court a statement of assets. You can then use these assets to decide if you want to put a lien on one to collect. In another example, Florida allows you to file a judgment lien certificate to help you put a lien on the personal property of someone who owes you money.
If the other party does not agree to voluntary payments or has stopped making payments on an installment agreement, some states (Arizona, for example) will allow you to file an Affidavit of Default with the court showing the unpaid balance and requesting action.
To find out the details of collecting on a judgment in your state, search on "collecting a judgment" and the name of your state.
Three Tips for Collecting on a Small Claims Judgment
Just Ask. Don't just walk away from the courthouse shaking your head. Contact the debtor (face-to-face is best) and ask politely. Say, "When will you be able to give me the money you owe me?"
Be Persistent. Because people who don't pay their bills are often reluctant to pay even court-ordered payments, you will need to be persistent in asking for the money owed you. The court doesn't automatically force a losing party to pay up; you have to actively work to get the court to garnish wages, put a lien on a property, or initiate an installment payment plan. State laws differ, so find out your rights for getting your money, and keep going back to the court for help. It's one of those cases where, if you don't ask, you don't get.
When All Else Fails. The old saying, "You can't get blood from a turnip," applies here. Sometimes, the person you have sued has no money, no assets, no job, no way to pay you back. As the Colorado Judicial Branch says, "If you are unlikely to collect, or if you have to hire an attorney to help you collect a Judgment, it may not make much sense to spend the time to go through a Small Claims trial."
Sad, but true. The best way to collect in small claims court is to make sure the person you are suing has the money to pay you.