It has been said that collecting a money judgment is often harder than winning one. That sounds reasonable to me. Putting together a winning case should not be terribly difficult with the right evidence. But afterward, when you are dealing with a judgment debtor who either cannot or will not pay, collection can prove challenging.
How long does it take? There is no black-and-white answer. The amount of time a plaintiff should plan to devote to collection depends on the circumstances of the case. A lot of things can influence collection timelines.
Waiting for a Possible Appeal
One of the first things to consider is a potential appeal. Judgment Collectors, a Salt Lake City-based collection agency that works on judgment collection cases in eleven states, says that both California and Utah require giving losing parties time to appeal. Collection cannot proceed during that period. It is 30 days in California and 28 days in Utah.
Other states have similar rules in place. But there are a small number of states that allow judgment creditors to begin collection efforts even during the waiting period. Should the defendant successfully appeal, all collection efforts must cease thereafter.
Enforceability Rules
States also vary in terms of their enforceability rules. In some states, money judgments are enforceable for only 5 years. The other end of the scale is 20 years. Judgment Collectors say that most states average 7-10 years for enforcement. After that, a judgment must either be renewed or abandoned.
A decade seems like a lot of time in the early days of collection. But when you are dealing with a debtor who either cannot or will not pay, a decade can pass pretty quickly. That’s why if a judgment creditor is even thinking about utilizing a collection agency at some point, that collection agency should be brought in on day one.
The Judgment-Proof Debtor
A worst-case scenario involves a judgment creditor dealing with a judgment-proof debtor after the fact. What is a judgment-proof debtor? It is a debtor with:
- A low paying job, or no job at all
- No assets of significant value
- No prospects for the foreseeable future
In essence, a judgment-proof debtor has no realistic means for making payment. His limited income puts wage garnishment out of reach. A lack of valuable property mitigates filing judgment liens or seeking writs of execution. And without reasonable prospects, the hope of that person’s financial situation changing is fairly dim.
Collection Efforts Can Take Years
All of this is to say that it could take years to successfully collect a money judgment. Even the most basic scenario, a voluntary payment plan, does not offer immediate relief. Imagine a judgment debtor facing a bill of $50k. Even if the debtor could afford to pay $100 every month, it would still take him more than 10 years to fully pay what he owes.
There is also the prospect of the debtor actively seeking to avoid his creditor. He doesn’t answer the phone or return messages. He does not respond to emails. The creditor doesn’t know where he works because he didn’t tell the truth when reporting his employment.
There is a reason that enforcement is set at 7-10 years in most states. Lawmakers and courts understand that collection takes time. They give creditors that time.
Are you currently involved in a civil lawsuit for which you expect a monetary award in your favor? If so, you might be one of the few lucky ones to get paid immediately. But don’t plan on it. Instead, plan to invest several years in collection efforts.
