You have pursued collection against your previous customer and have a judgment in hand. Now what?
Attorney Deanne Koll discusses the options a lender has to collect on its judgment.
Disclaimer: This video is designed to be educational and informative, but it is not legal advice. Collection law is constantly evolving and subject to change. Each situation is unique, and each case should be addressed to fit the unique situation.
You have pursued collection against your previous customer and have a judgment in hand. Now you want to actually recover some money…not just have a piece of paper.
The most common collection action is an earnings garnishment. An earnings garnishment (sometimes called a wage garnishment) is a separate lawsuit, which adds the debtor’s employer. The wage garnishment directs the debtor’s employer to take a portion of the debtor’s paycheck and pay it to the creditor, rather than to the debtor.
This is an effective way to collect on a judgment. However, a creditor should be aware that there are a number of instances in which a debtor is “exempt” from wage garnishment. Most notably, if the debtor is on any public assistance (like food stamps or Badger Care) or if the debtor falls below the federally-mandated poverty line.
Another common collection action is a non-earnings garnishment. A non-earnings garnishment action is a separate lawsuit, which adds a third-party who owes the debtor money. For example, if the debtor is owed rent from a tenant, the creditor could file a non-earnings garnishment to attempt to force the tenant to pay the creditor, rather than the debtor, the rent money.
There are also other less frequently used methods of collecting on a judgment. You should discuss the particulars of your case with your attorney.