Anyone placed a judgement against a business?

[Wade Lippman]

Good luck to you!

We had a customer that owed us a buttload of money, and had no intention of paying. We made a final last-ditch effort by sending an employee who had been a bouncer in biker bars for years to talk to them (he was a very nice fellow, and a skilled network admin.) Voila! they paid us enough of the bill that we were happy. I still don't know what he said to them. As we had already given up on the money, we used the money to go on vacation.

35 years ago I took my car in for some warranty work and they, without asking me, replaced a tail light (or something, I don't remember what now...). They charged me $10 for it. I explained that I had already bought a bulb and was certainly not going to pay them $10 for a $0.25 bulb. The service manager called me into his office and had three mechanics with big wrenches stand behind me while he explained that I would pay for it or I wouldn't get the car back.
I suggested he call the sheriff or I would.
He took the bulb out! Hard to justify $9.75 for putting a bulb in, when it cost less than $0.25 to take it out.

[Scott Shepherd]

I know this is bringing an old thread back to life, but just in case anyone else might be in a similar situation, I thought I'd post an update.

The process here is that you go to the clerk of the court and file a "Warrant in Debt" against the registered agent of the company. You can call the SEC and get that info (I think it was the SEC). Once that is filed, they give you a court date that's about 45 days out, which gives them up to 30 days to serve the warrant.

In our case, we thought for sure that once they got the warrant, they'd reach out and make some attempt to pay us. Nope. Not a peep.

Apparently there's really two outcomes. One is they show up in court and deny they owe it, at which point the judge will then set a trial date and you'll have to come back another day and go through that process, or two, they show up and admit they owe the money and the judge will award you a judgement.

That dings their credit pretty hard (I think our accountant told us 100-200 points off their credit score), and it stays on their record for a while. Our accountant said it's a really bad thing to have on your credit record.

At that point, it's up to you to pursue methods of getting paid. You can then start the process of wage garnishment or seizing property if the court allows, but those are all separate processes that take additional filings in court systems and you'll have to go through all of that.

In our case, we walked up to the bench, the Judge asked him "Do you owe them the money" and he said "Yes sir", and the Judge said "Judgement in your favor" and that was the end of it. Took about 15 seconds. I asked the Judge what do we do next, and he said "Work out a payment plan with him" and I said "Your Honor, if we could work out a payment plan with him, we wouldn't be standing here". He said "That's why I awarded you the Judgement, step outside and work it out, if he doesn't pay, come back to the court and we'll take the next step."

We went outside the court, told him what we'd take on a monthly basis, told him if he missed a single payment by a single day, we'd haul him back in court and start going after his assets.

To date, he's paid on the due date every single time. Funny how he didn't have money to make payments before, but he appears to now......

Plus, the court allows you to charge 6% interest on all money owed from the time of the Judgement, so we'll get a little extra cash from that, along with the cost to file the Warrant in Debt.

It was an interesting process. In some ways, I'm glad we went through it because now we have a lot better understanding of the system.

[Chuck Wintle]

Gotcha. It's more than $5000. The guy that has done it said this prevented you from having to do all the collection related stuff, that's why he used it so easily. I don't know, but I will know shortly

I've emailed the owner of the company this afternoon, explaining needed to be resolved and he needed to get it touch with me immediately to get it resolved. We'll see how far that gets.

Pursue the money with a judgement as has been mentioned assets can be sold and bank accounts garnished to pay you. let us know how it goes.

[Mike Chance in Iowa]

Thanks for sharing the update Steve. I agree. That is definitely an interesting process and it's quite surprising in the way that guy has behaved. It's good to know you were able to recoup your costs with filing the warrant and even better, that you are finally receiving payment.

[Brad Adams]

I'm glad your getting something Scott. It really sucks as a small business owner, that someone can stick us for five or even ten thousand dollars and get away with it. Yet someone can steal a $5 item from a store and get arrested. I've had good luck in the past getting the paperwork from the clerk of court, filling it out, and sending a copy of it to the deadbeat. I give them a three days to respond and set up payment arrangements or it will be filed. It works 90% of the time.

[Scott Shepherd]

The part I don't get is that it's now screwed up his credit worse than what it already was, so if you're paying us now that the Judge told you do, if you would have just paid us the same thing, the same arrangements, we wouldn't have had to screw up your credit. Baffles me completely. When we left the courtroom, he said he was financially in trouble, that he owed a lot of people a lot of money. He wanted to setup a payment plan that would have taken him 19 months to pay us in full. That's 19 months plus the last 12 or so that it had been, meaning he wanted to pay us over almost 3 years. We told him it wasn't happening, he had 4 months to pay it off. He said there was no way possible, so we told him 7 months and if he didn't like it, we could walk to the clerk's office and start filling out the next round of paper work. He accepted.

He pleaded for more time. I said "We're not your bank, figure it out".

So far, so good, but that's always subject to change I suspect it will. Nothing comes easy from him, so we're already bracing for him missing payments, but we hope that doesn't happen.

[Myk Rian]

Be glad he didn't file for bankruptcy. You could have gotten nothing.

[Rich Engelhardt]

Plus, the court allows you to charge 6% interest on all money owed from the time of the Judgement, so we'll get a little extra cash from that, along with the cost to file the Warrant in Debt.

I believe you can collect on the interest (and any associated court costs) that are due up front and before applying any money towards the actual debt.
That really PO's the dead beat - - when they have to make several payments, only to find out after paying all that money they still owe you what they did in the first place .
I know - it's not very "nice" to enjoy that,,,,but,,,, doggone it, you deserve something for the misery they put you through!

[kevin nee]

I had someone owe me $25 thousand took two years with $400 to $500 payments couple tomes a month. I think the largest payment was $1500. After that I increased my rate 5% and gave a 5% discount if paid within 15 days. That worked worked pretty well until about 2009 when the economy was in rough shape. They were paying in 30 or 40 days and still taking the 5%. Closed the business in 2011. Now I do woodworking,fishing and my garden looks a lot better. I should have retired 40 years earlier! Good luck getting your money!

[Scott Shepherd]

Be glad he didn't file for bankruptcy. You could have gotten nothing.

We saw that happen in a case before us. The people got up, the deadbeat was a no show, and they thought they had it in the bag. They read off the info, the Judge says "As of 8:21 this morning, they have filed for bankruptcy." The person said "Well, what about......." and the Judge said "Everything owed to you prior to 8:21 this morning is done. You can't get it."

[Steve Schlumpf]

Scott - filing for bankruptcy is different than having it granted. While certain protections are given to the debtor once filed, the people can still seek a judgement but have to do it through the bankruptcy court. Depending on monies owned and type of debt, they may still be awarded something - as opposed to absolutely nothing.

[Scott Shepherd]

Gotcha Steve, I think he may have been referring to "you can't get it" in reference to the case standing in front of him. They kept coming back at him, saying "What about ______", or "Yeah, but what about from this date.....". I think he point was it didn't matter from his perspective, the filing had taken place and that stopped him from issuing any judgements in their favor.

[Phil Mueller]

I'm glad you were able to work it out with the customer after the judgement. I took a business to small claims and by default (the business never showed up for the court dates) I won. Great, I thought. Then I was told I needed to provide the means to collect. Took me about 3 months, but finally located someone who had paid them for some services and still had the cancelled check (with their bank account number on it). Filed that with the court and they withdrew it from his account. All in all about a 12 month process.

[Jerome Stanek]

I'm glad you were able to work it out with the customer after the judgement. I took a business to small claims and by default (the business never showed up for the court dates) I won. Great, I thought. Then I was told I needed to provide the means to collect. Took me about 3 months, but finally located someone who had paid them for some services and still had the cancelled check (with their bank account number on it). Filed that with the court and they withdrew it from his account. All in all about a 12 month process.

I am glad that worked with the with draw. The court told my son that doing that is a one time shot. If there is not enough to cover it you could end up with just a small amount.