When collecting past-due accounts, winning a judgment is only half the battle. The other half is actually collecting, which requires you to find and seize the defendant’s assets. This article will discuss the best assets for enforcing your judgment, and the best strategies for finding them.
Collecting Your Judgment — The Best Assets To Seize
After a judgment, the best assets to seize are generally bank accounts, since they’re already liquid and you don’t need the Sheriff to sell them. All the Sheriff needs to do is seize the account, which freezes it up to the judgment amount until you get an Order releasing it to you.
You can also have the Sheriff seize and sell non-liquid assets (such as inventory and equipment), but liquid assets save time and money.
Collecting Your Judgment — Searching For Assets
First, try to find what you can independently, without the defendant’s knowledge, since you want the element of surprise when you seize assets. If you keep copies of your customer’s checks and wire payments, or if you have a recent credit application, they’ll tell you where the customer banks.
If your credit application is older, the bank information might be outdated; however, it should still contain the customer’s tax number, which an investigator can use to find its accounts.
Collecting Your Judgment — Using Post-Judgment Discovery
After seizing what you can under the radar, you can use a legal process called post-judgment discovery to identify the defendant’s assets. A skilled collection lawyer can use this effectively.
The main tools available are an information subpoena, which is a pro forma questionnaire, and an Order for Discovery, which requires the defendant or anyone with relevant information to produce records and/or appear for a deposition.
Of course, once a debtor knows you’re after its assets, it could try to move them, which is why stealth and surprise are preferable when enforcing your judgment.
For more information on collecting past-due accounts receivable, or if you’d like to discuss a specific collection issue, call me at 856-667-1669 or contact me here.
This material is for informational purposes only and should not be construed as legal advice. No person should rely on this information without seeking the advice of an attorney.