My father was a small business owner for something like 40 years, and through the course of that time, he had a few run ins that ended up in court cases - mostly for people not paying him for work done.
He maintains that suing is easy, but collecting the money is hard. He claims that a judge can rule in your favor, but that doesn’t mean the people pay up.
He’s a bit old and set in his ways, and his experience is many decades old. But I’m curious - is this true? Can you sue someone for something, win, and still not collect any cash? Is there nothing you can do (garnish wages, put a lien on a building, get the sheriff to pay a visit) to collect fund that are legally owed to you?
I’m just looking for general answers here. I don’t have a lawsuit pending or anything like that, so I’m not looking for specific legal advise. Just curious.
I am the proud holder of a judgment in the neighborhood of $25,000. I have never been able to collect a dime. I was speaking with a guy that has the same problem to the tune of $600k. The guy that owes it is on work-release from jail for the 4 felony counts associated with the case. He can’t even collect the money that the guy makes while he is on work-release.
Your father is exactly correct. Getting a judgment and getting a collectible judgment are two very different things.
Until you get involved, you may not realize the extents certain people go to to make themselves “judgment proof.”
I recall when I got a judgment against a Houston NFL player. I didn’t know, however, that Texas law (at least at the time) did not allow wage garnishment. Every monday I would expect a call from my client, bitching about how he saw that deadbeat on TV.
Other states allow exemptions against collection for a house and car - some - FL I believe, place no maximum on their value. You a debtor could live in a mansion and drive a Ferrari, but they would be untouchable for judgments.
The other significant distinction is between suing a person as an individual, or in their capacity with respect to a business. You might be surprised to learn how little ostensibly wealthy business owners personally hold title to.
I’ve known people who switched jobs so that there wages wouldn’t be garnished because they don’t have to tell you where (or if) they work. They also either don’t use banks or keep where they bank secert so that lien holders can’t freeze the account with a court order and sieze the account. Sometimes they bank in another state These people are good at transferring assets into family member names as well. So that luxery fishing boat isn’t really there’s because they make the payments and pay the insurance thru a third party such as mom or a brother.
This is why O.J. lives in Florida. I seem to recall that Burt Reynolds took advantage of this provision in relation to a bankruptcy a couple of decades but may be mis-remembering.
Ditto. I have plenty of uncollected judgments. In fact, I recall reading somewhere that more than half the dollar value of money judgments goes uncollected.
The trick is to investigate peoples’ creditworthiness before you extend them credit. Even asking people “Do you mind if I run a credit report?” does wonders. Because deadbeats usually act extremely offended when you ask them that.
I go one further. I don not extend credit. Never. I do not even have stationery for billing purposes. But someone bounces a check and fails to make good on it. . . :mad:
Actually it’s not that difficult to collect if you stay with it. The thing is many people give up. It’s possible but it takes work, especially if you have a person with a minimum wage jog. They will simply jump jobs if you try to attach their wages. But it’s really easy to find out if a person has a bank account, IF you have the social security number. This is why it’s important to get that when extending credit. I have done paperwork for an attorney when I was working my way through college and gettting an attachment is quite easy.
The thing is when you go to attach you also can collect any costs associated with it IF when you sue for the judgement you ask the judge for it. Once you attach wages the employer is liable if they fail to collect the wages (if applicable). Of course if you live in a state with some odd laws it makes it harder, but that is why you just keep abreast of that person. With a SS number it makes it incredibly easy to do this. Then you tack the cost of it on to the debt. Other laws give you the option of up to 18% interest you can add on to the uncollected part of the debt.
I found very few people cannot at least pay you something if you stay with them. Unless they are in jail or minimum wage job jumpers. What we did in the cases of the state of Texas and other such, we’d simply (if possible) file the judgement in the state the bank that paid out the payroll check was located. In this case it was Bank Of America so we filed in California where the paychecks came out of.
This also doesn’t apply to bad checks (which involves a seperate law,) nor does it apply to alimony or child support and of course not tax (state and federal) debt.
We filed for child support for some dead beat guy who was in jail and we got his 50¢ a week attached so he had no money in jail. Yeah it symbolic but that guy couldn’t buy any cigarettes or coffee or anything in jail. So you gotta try
I’ve got two uncollected judgements - one is for about $80 from a former landlord. It would cost me more than that to try and collect, so all I can really do is know that I won my case just slightly more than she won her counter-claim. It’s after you win a case that you discover that the person is individually destitute, doesn’t hold a job, and the multi-million dollar building they “own” is actually owned by a trust.
I recall that the late Roy Cohn was sued by hundres of people-who (despite being awarded judgements) never got a dime. His secret? He owned NOTHING-everything was leased fromthird party entities.
How he(Cohn) was able to get credit amazes me-somehow he did.
Sure, that’ll work. Of course, it’s possible that your business might be more profitable if you extended credit and accepted that you will have some bad receivables.
Cohn was a former highly influential Senatorial aide who, after the fall of McCarthy, jumped ship and spent 30 years in private legal practice with a client list that included everyone from Donald Trump to Mafia leaders to the Archdiocese of New York. He also remained a political advisor to presidents, including Nixon and Reagen. He exercised an extraordinary amount of personal and political power. If you were a no-name loan officer and Donald Trump called you up and suggested you lend Cohn money, are you, in 1984 New York City, going to say no?
That was my concern when I changed office policy eight years ago. I also worried about sending potential clients to my competition. However, it cuts overhead (no employee sending out bills), and my local colleagues have all since followed my lead.
