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Post Judgment Collections

Misapplication of Construction Trust Funds

A judgment is just a piece of paper. But did you know that you can turn that paper into cold hard cash through what lawyers like to call Post Judgment Collections? There are specific ways you can collect on those judgments, but litigation is costly, and just how do you decide to move forward with litigation? So, before we dive into some of the ways to collect judgments, it is important to discuss whether it is worth getting a judgment in the first place.

Is a judgment worth it?

One of the first questions we ask a client before they hire us to collect money owed to them is, “By filing this lawsuit, will you be throwing good money after bad money?” What we mean by that is, this will cost you money in attorney fees to get a judgment against whoever owes you money, but do they have money or assets to pay your judgment? If the person you get a judgment against can’t pay you, it is not worth spending the attorney fees on getting a judgment.

Instead, use the money you would pay an attorney for a post judgment collection to grow your business or even take your family on vacation. Trust us, you will be much happier with the results than just having a piece of paper with no effect. Therefore, we challenge you to seriously consider the collectability of any judgment you may be awarded before you file suit.

Don’t throw good money after bad money

Collecting what is yours is crucial to the livelihood of your business. We have a team ready to take your call to protect what is yours, collect what is yours, and educate yourself on the front-end!

Is the judgment collectible?

A question we often get is, “How can you determine if your judgment will be collectible?” The truth is, you need to start collecting the evidence required to answer this question at the beginning of the relationship. Remember, when you have already been stiffed, it’s too late. Before you give someone money or credit, you must have a written agreement. If you are extending credit, have the party you are extending credit fill out a credit application. It does not have to be anything too complicated—here is a link to a free credit application you can use.

What are their assets?

Find out where they bank, and if you are ever paid via check, make a copy of it and keep it in your records. One of the most accessible assets to collect is cash in a bank account. Next, we recommend thinking about what other assets they own. Pay close attention when you have conversations with them, and don’t forget to ask questions. Do they own their office building? Do they have a second home or a vacation home? Do they own a boat, ATV, or RV? Take note of these things throughout your relationship.

Put the repayment terms in writing

When in doubt, write it out! If you are lending money, you must have a written agreement explaining the terms. This agreement can include how much you are lending and what the repayment terms are. You’d be amazed at the number of defenses brought to a collection lawsuit that do not have written agreements. Without a description of the repayment terms in writing, there could be a claim that the money was given as a gift. If you lend money to a company without a written agreement, they can say you were investing in the company, and it’s not a loan that does not need repayment.

Should you try to collect a judgment?

The bottom line is there are so many factors to consider before deciding to collect a judgment. The most important part of collecting a judgment is the steps you take at the beginning of the relationship. It’s vital to protect yourself any time you extend credit or loan money. Have something in writing explaining the terms and pay attention to details throughout the relationship to help you collect your money should you get stiffed. If you are unsure of the course of action you should take, call us today.


Your friendly Cromeens Law Firm Attorney is at your disposal to answer any questions you may have. Our Texas construction lawyers will discuss your situation and weigh all of the options before choosing how to best collect the judgment. We’re here to help you find the most cost-effective route, and the tips in today’s blog are good examples of how we can help you and your company save valuable time and money by avoiding costly attorney fees and a lawsuit down the road.

Karalynn Cromeens

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