7 Mistakes You Are Making That Prevent You From Collecting Your Judgment.
1. Waiting too long to take action - While the value of a judgment increases each day with interest, the actual chances of collecting often decrease with time. (Although in certain cases the opposite is true.) As time marches on, circumstances change. Judgment debtors get sick, die, move, accumulate more debts and liens, disappear or go broke. Moreover, each year the California legislature tweaks the code making the law less favorable for creditors. As a case in point, certain types of judgments no longer can be renewed indefinitely and over time your judgment can expire. CCP§683.120.
2. Thinking your judgment is as good as cash.
Triumphing in court doesn't guarantee payment. Sadly, after victorious legal battles the majority of judgments are never collected. Winning in court is the first step, but the real work begins when judgment is entered.
3. Contacting your debtor - Letter writing and phone calls are usually a waste of time.
After an in-depth investigation, it's best to simply enforce the judgment as set forth in the Code of Civil Procedure.
4. Waiving your rights. - Beware entering into a written settlement agreement. If not crafted correctly, you may inadvertently waive your hard-won rights as a judgment creditor.
5. Not checking for mistakes - All too often court papers contain errors. This can impede post-judgment enforcement. Prior to filing suit, make sure all defendants are correctly named, and middle names and all 'akas' are included.
6. Not filing liens. It takes little effort to file liens with the county recorder and the California Secretary of State. If your debtor has an ongoing court case, you may also file a lien in that pending action. Serving a debtor exam also gives you a powerful 'ORAP' lien.
7. Outsourcing collection to the wrong entity. Outsourcing your judgment in many cases can be the best way to collect. But choosing the wrong company can spell disaster. Fully explore all options to see if outsourcing makes sense and if so, how to find the right fit.