If you read our last blog, we discussed weighing all the options before deciding if it is worth getting a judgment or not. Suppose you decided to move forward with litigation to collect the money you are owed and have been awarded a judgment by the court. Congratulations, you won! But, now what? How do you turn that judgment into cold hard cash? Time is of the essence! There are a few options to consider when determining how to get your money in the fastest way possible. Let’s take a look at how to turn your judgment into cold hard cash!
Our construction attorneys at The Cromeens Law Firm work incredibly hard to ensure you are protected and aware of all your options.
The three main ways to collect on a judgment
- Through a Writ of Garnishment: this is collecting money from a bank account.
- Through an Abstract Judgment: this is a passive and easy action that allows you to put a hold on properties the debtor owns.
- Through a Writ of Execution: this is collecting money by seizing & selling the debtor’s real and personal properties.
Writ of Garnishment
For most situations, this is the best way to collect on a judgment. Do you know where the debtor banks? You don’t need to know the account number, just the bank’s name. This is why it’s so important to collect this information during your credit check before you loan anyone money. If you know the bank, you can file an application for a writ of garnishment with the court clerk who gave you the judgment. Once the application is approved, the clerk will issue a writ of garnishment.
Once you receive the writ of garnishment, check to make sure all the information and amounts are correct. Once you have confirmed all the information is correct, the writ of garnishment must be served on the bank by a constable. Find the constable in the same jurisdiction as the registered agent for the bank. You will then need to call the constable and confirm that you have the correct office and find how much they charge to serve a writ of garnishment.
Once you pay the constable the fee, he will serve the bank with the writ of garnishment. Once the bank is served with the writ of garnishment, they will freeze all accounts the debtor has at that bank. After that, someone from the bank will contact you to give you the funds from the bank account up to the amount you are owed. In Texas you can’t garnish retirement accounts or wages, but once the wages are in a bank account, they are fair game.
Abstract of Judgment
An Abstract of Judgment is a passive and easy action that you can do independently without the help of an attorney. First, you need to request an abstract of judgment from the court clerk that gave you the judgment. There is usually a small fee for the abstract, typically $20 or less. Once you receive the abstract, review it to make sure all the information and amounts are correct.
Once you have verified that everything is correct, you need to file the abstract with the clerk in the county that the debtor owns the property. If there is more than one county where the debtor owns property, file the abstract in each county. Once the abstract is filed, the debtor cannot buy or sell the property without dealing with your judgment. The abstract just can’t be filed on the debtor’s homestead.
Don’t work for free
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!
If all else fails: writ of execution
Garnishing someone’s bank account is one of the most effective ways to turn your judgment into cold hard cash, but if that doesn’t work, another way is through a writ of execution. This way is not as effective as a garnishment, but it can still get the job done. A writ of execution allows you to collect money through selling seized real and personal property owned by the debtor.
First, you will have to have a writ of execution issued by the court clerk that gave you the judgment. Then, you have a constable seize any real property (ex: investment properties or vacation homes. As long as it isn’t a homestead you can seize it) and personal property (ex: boats, cars, jewelry), and have it stored, and then sold at auction. You will receive the funds from the sale of the property at auction, minus what it costs you to seize the property, move it, store it, sell/auction it off, the court costs, the constable costs, etc.
We often see that this scenario leaves judgment creditors with very little left at the end. A writ of execution is better used as a scare tactic to the debtor to get them to make a deal to pay you back before seizing their property rather than actually going through with it. Use this tactic as LEVERAGE.
There are other ways to collect your judgment, and consulting with an experienced attorney will help you find the best solution for your specific scenario. Your options will depend on your specific case and you should consult with a licensed collections lawyer. Contact our office today to discuss your options. We are here to assist you with your legal matters concerning your construction business and will work tirelessly to ensure you are on the right path to success! Call The Cromeens Law Firm today at 713-715-7334.