The collection of a judgment is often the final lap of a long race.  Whether you are dealing with a breach of contract, a car accident, or an open account, you are forced to file a lawsuit to collect the amount you are owed.  You prevail and the judge enters judgment in your favor.  Now what?

            Some will dampen your spirits by referring to your hard-fought judgment as a mere “piece of paper,” upon which you will never collect.  However, there are a number of methods by which you may collect your judgment and this article is intended to give you an overview of those methods.  By employing these few simple strategies, you can increase your chances of collecting funds from your opponent. 

            When the Check Really Isn’t in the Mail – Pre-Judgment Suggestions

            Perhaps the best strategy to increase success in collecting your judgments is to prepare for collection before a problem ever surfaces.  When you begin your relationship with a potential customer, particularly if you often provide customers with open accounts, obtain as much information on your customer as possible.  Don’t stop with a name, an address, and a telephone number - obtain a tax identification number, a personal guarantee, personal references, or even banking references.  After all, your customer is essentially asking you to extend credit.  The information may be of limited value at the outset, but, as you will see below, it will prove invaluable when that starry-eyed customer decides your bills aren’t worth paying.

            Pre-judgment measures may also be available.  Pre-judgment attachments and garnishments allow you to seize the assets of the defendant before ever obtaining judgment.  These measures share two common requirements.  First, there must generally be some evidence that the defendant resides out of state, is concealing assets, or is removing assets from the state.  Second, Georgia law requires the deposit of a cash bond with the clerk of court in double the amount you are seeking.  If the defendant owes you a substantial sum, these measures are probably not cost-effective since it would require an armored vehicle to transport a substantial amount of cash to the clerk.  Otherwise, this may be a swift way to obtain funds you are owed.

            Picking Up “Pieces of Paper” – Obtaining and Recording your Judgment

            Once you have obtained a judgment against the defendant, a plethora of opportunities present themselves.  Before you can execute on your judgment, however, Georgia law provides a 10-day waiting period during which a judgment creditor cannot take action against the judgment debtor.  There are two exceptions to this “stay of execution” – first, no stay is imposed if you have obtained a default judgment.   Second, the stay is waived if there is a written agreement signed by all parties.  If neither exception applies, your first task after the 10-day stay has expired is to obtain a writ of fieri facias, or “fi. fa.” from the clerk of the court in which your judgment is filed.  The cost is extremely low (generally $5.00), but the potential benefits are many.

            The fi. fa. should be recorded on the general execution docket maintained by the clerk of superior court in the county where you obtained judgment.  Once you obtain a fi. fa. and it has been recorded in the judgment county, you may record it in any county in Georgia in which you suspect the defendant owns real property (a farm, a home, a condominium, etc.).  The fi. fa. provides a lien against any real property owned by the defendant, and the property cannot be transferred until the outstanding lien is satisfied.  The judgment lien is active for seven years, and may be easily renewed if necessary.

            If the defendant resides out-of-state, you may also file your judgment in any other state in which the defendant resides or owns real property.  Although the judgment is effective from the date of filing and service in the foreign court, other states generally require a waiting period of 30 days before judgment creditors can begin the collection process.  Likewise, if you obtain a judgment in another state, your judgment may be domesticated in Georgia using the same procedure to allow you to start collection efforts in Georgia.  If the defendant resides in a foreign country, you may also be able to domesticate your judgment from a court in the United States.

            “L” is for the Way You Levy Assets – Fi. Fas. and Levies

            A fi. fa. also provides your ticket to “levy” against any real or personal property the debtor owns.  Once your fi. fa. has been recorded, you may send a copy of the fi. fa. to the sheriff of the county in which the defendant owns real or personal property, including vehicles.  For a small fee, the sheriff will personally serve the defendant with the fi. fa. and make a demand for payment.  If the demand is refused, you may contact the sheriff to schedule a levy, or seizure, of the defendant’s assets.  Generally, any personal or real property belonging to the defendant may be seized.  However, you cannot uniformly levy against any assets that have certain pre-existing liens.  During the levy, the defendant may point to certain assets that may be seized; if the defendant identifies certain assets, the sheriff is bound to seize that property first.   

In the case of real property, the sheriff will provide notice to the person in possession of the land and to the defendant (if the two are different) and advertise a “sheriff’s sale.”  For personal property, you will need to arrange for removal, transportation, and storage of the assets for a short period of time.  If the assets are too large to be moved (a large piece of equipment, for example), the sheriff may conduct a “constructive levy” in which the sheriff posts notice on the assets indicating that the assets are subject to levy and sale.  In either case, the sheriff will then publish notice of a “public sale” for four weeks.  At the sale, usually at the county courthouse, the sheriff will solicit bids and will sell the assets seized to the highest bidder.  The sheriff’s costs are first subtracted and the remainder will be provided to you.  If the sale generates more than the amount of your judgment, the balance will be sent to the defendant.  If the sales price is less than the amount of your judgment, you may continue your collection efforts, to include further levies against additional assets; this process may continue until your judgment is satisfied.  While the prices generated at these sales are low, seizure may disrupt the defendant’s ability to conduct business and make the defendant more amenable to offer payment.  If possible, it may also be beneficial for your company to offer a bid in the amount of your judgment.  If you are the high bidder in a sale that historically produces low returns, you become the owner of the property and may be able to sell it under much more favorable conditions, thereby increasing your recovery.

            Taking your “Piece of Paper” All the Way to the Bank – Garnishing
            Bank Accounts

            One of the most effective tools for collecting on a judgment, and one that does not require a fi. fa., is a bank garnishment.  Simply stated, you may file a separate action against a bank in order to recover funds the bank owes the defendant.  Once the garnishment is filed, you will need to serve the “garnishee” (the bank) and the garnishee is required to file an answer within 45 days.  You will also need to serve the defendant within three days of service of the garnishee, although that may be accomplished by sending the defendant a copy of the garnishment action by certified mail.  The apparent purpose of this provision is to satisfy the obvious concern that the defendant may move funds before the bank has the opportunity to garnish them.  If there are funds in an account owned by the defendant, the bank places a freeze on those funds and sends the funds to the clerk of the court in which the garnishment was filed.  If there are no accounts, banks are allowed to respond immediately.  Significantly, if the bank does not respond as required, the bank itself becomes liable for the amount of your judgment.  In addition, the garnishment reaches any other property owed the defendant by the bank, to include the contents of safety deposit boxes.

            Take this Job and Garnish It – Garnishing Employers

            Another excellent method for collecting your judgment is a wage garnishment.  If the defendant is an individual and you know where she works, you may file a garnishment action against the employer to obtain a portion of the defendant’s payroll until your judgment is satisfied.  As with a bank garnishment, you’ll need to serve the garnishee and then, within three days, serve the defendant.  If the garnishee fails to respond as required, the garnishee becomes liable for the amount of your judgment.  While the wage garnishment is a certain way to obtain partial payment, it is only as good as long as the defendant is employed by the garnished employer.  If the defendant obtains new employment, you may file a garnishment action against the new employer.  Generally, the maximum amount that can be garnished is 25% of the defendant’s weekly gross earnings.  Pensions and retirement benefits are exempt in most cases.

            Garnishments are not restricted to banks and employers.  Any entity that owes the defendant money or property may be garnished.  This might include accounts receiveable, a landlord, or any of a number of other possibilities.  In these cases, the procedures outlined above would still apply.

            Looking Under Rocks and other Worthwhile Efforts – Post-Judgment
            Discovery Techniques

In the event you have been unable to obtain information about the defendant’s assets, the

law provides a number of measures to assist you.  Initially, you may serve post-judgment interrogatories upon the defendant which the defendant is required to answer under oath.  If the defendant fails to respond, you may ask the judgment court to compel the defendant to respond.  If the defendant again fails to respond, you may file a motion for contempt against the defendant which, among other things, could land the defendant in the county jail.

Another approach is to schedule a post-judgment deposition of the defendant.  As part of the notice of deposition, you can also require that the defendant bring documents indicating accounts held, stocks or bonds owned, or any other paper demonstrating ownership of an asset.  If the defendant does not appear, you can again petition the judgment court to hold the defendant in contempt.

A final method to learn about the defendant is to simply ask those with whom the defendant transacts business.  You may file non-party requests for production of documents upon anyone or any company to find out what information the non-parties may have regarding assets owned by the defendant.  This might include asking the lien holder of a vehicle owned by the defendant for copies of checks the defendant has written to make payments; then, you would be able to serve a garnishment against the defendant’s bank.  If the judgment you obtained is a default judgment, because the defendant never entered an appearance in the underlying case, you need not even notify the defendant that you have served these requests.  If a subpoena is necessary to enforce your requests, however, you will need to serve a copy of the subpoena on the defendant.

            Bankruptcy and the Fair Debt Collection Practices Act – Rules for
            Fighting Fair

            If a defendant files a petition for bankruptcy, federal bankruptcy law imposes an automatic stay which prevents any further actions to collect your judgment.  At that point, you cannot file suit against the debtor, continue an action against the debtor, or continue your efforts to collect your judgment.  However, there are several circumstances in which you may be entitled to relief from the stay.  Any such relief must be pursued in the bankruptcy court in which the defendant filed the petition.  Penalties for proceeding with efforts to collect a judgment after the bankruptcy petition is filed are stiff and include the attorneys’ fees for the defendant.

            The Fair Debt Collection Practices Act (“FDCPA”) applies to virtually any effort to collect a debt from an individual debtor.  Generally, this federal law prevents debt collectors from pursuing many of the tactics for which debt collectors are now infamous – abusive language, multiple telephone calls, calling at unreasonable hours, spreading word of the debt to the defendant’s employer, and the like.

            Significantly, the FDCPA does not apply to business defendants or to defendants resulting from a car accident.  As a result, you may be free to pursue any measure of collection against a business defendant without fear of the FDCPA.  However, other areas of the law will still protect the business defendant, including libel and slander laws. 

            As you can see, there are several different methods in which you can collect on your judgment.  Whether you levy against the defendant’s assets or garnish the defendant’s bank and employer, patience and persistence are the primary ingredients for successfully collecting on your mere “pieces of paper.”