A court judgment has been won and the debtor owes money. The National Judgment Recovery Center divides the collection process into steps like abstraction of judgment, research upon judgment and debtor assets and engaging counsel at the court.
A court judgment has been won and the debtor owes money. The collection process may be easier than it seems.
The National Judgment Recovery Center's practice divides the collection process into the following steps:
· Abstract the judgment
· Research contact data for each of the debtors in the judgment
· Research assets owned by each of the debtors
· Research debts and liens against each of the assets or debtors
· Conclude upon a best option for collection
· Engage counsel to file the necessary documents with the court
Abstracting the judgment is just a fancy way of publicly posting the judgment in the county records to notify the world that the debtor owes money. The creditor must be careful regarding how the abstract of judgment is prepared. There are specific rules regarding who to name, what information much be included, and who can prepare the abstract. In most cases, it is simplest to ask the court to prepare an abstract of judgment, and then have the counsel review it to confirm it has been prepared correctly. An abstract of judgment is invalid if not prepared correctly, even if the court prepared it! (However, its possible to file another abstract of judgment if the first was prepared incorrectly.)
Each of the debtors should be researched, if there is more than one. If one of the debtors is a person, then their marital status should be checked if a spouse is not named. Sneaky debtors sometimes put property in their spouse's name! However, in many cases, its still possible to collect on this property, depending on state laws. (For example, Texas is a community property state, so unless strict laws are followed, all property is jointly owned by the husband and wife, regardless of how it is titled.) Its good to use court resources such as marriage records, divorce records (always a wealth of information!; sometimes more than what anyone wants to know), on-line phone books, paid phone book services such as Net Detective and Intelligator, Accurint, assumed name aka doing business as records, appraisal district records, etc.
Then each of the assets owned by each of the debtors should be checked. If a "company" is owned, is it a business in reality, or just on paper. Check appraisal district records for both real property and business personal property searching by both name and address. Check the secretary of state records for companies owned by the debtor. Also research real property records using a site such as courthousedirect.com to locate property owned by the debtors.
A post-judgment discovery can also be done to discover assets owned by the debtor. This topic will be covered in a separate article.
After locating the property owned by the debtors, both voluntary and involuntary liens must be checked. A voluntary lien is given voluntarily such as a real estate mortgage or a business loan. Typical involuntarily liens include judgments, IRS liens, state tax liens, mechanic and material liens (aka M&M liens), property tax liens, city mowing liens, liens for cost of demolition by the city, etc.
Evaluation of the market value of property versus the mortgages and other liens should be carried out. To own a house worth $100,000, if there is a mortgage against it for $105,000, and a federal tax lien of $30,000? Especially when foreclosure of the house under lien will more than likely create an event of default under the mortgage documents? (This will allow the current lender the ability to foreclose the lien off.
After evaluating the debtor's property, decision should be taken whether to proceed further. If the debtor has property with equity, a writ of execution should be filed to get the constable (the man with the badge and the gun) to sell the property. This ends the excuses! The debtor either has to pay, and pay the cost for the writ of execution, or the property will be sold!
For more information on how to collect a money judgment, contact the National Judgment Recovery Center in Texas. Talk to the National Judgment Recovery Center for court judgment recovery in the Texas region for a faster money collection process.