Once you obtain a Judgment, the next issue is how to collect on your Judgment. Some individuals are virtually “judgment proof” and do not have any significant assets or income which could be used to satisfy your Judgment. You can have a Judgment for a Million ($1,000,000.00) Dollars but if the individual or company is Judgment proof, the Judgment is worthless.
The most common forms of collection involve Writs of Garnishment and Writs of Execution. A Writ of Garnishment is issued by the Court acknowledging the Judgment amount and directing a third party who pays wages or holds property of the debtor to pay it over to you. In Michigan, the maximum amount which can be taken from wages is Twenty-Five Percent (25%). This limit does not pertain to alimony or child support. A Writ of Garnishment can also be issued against any bank which holds funds of the debtor. I was able to successfully collect on a Judgment by sending a Writ of Garnishment to a client of the debtor who had an ongoing contract with it to produce a quarterly magazine. The debtor, not wanting to lose the business in the future, continued to produce the magazine and the debtor’s customer paid the entire amount of the invoices to me until the Judgment was satisfied pursuant to continuing Writs of Garnishment.
Another method to collect on a Judgment is to ask the Court to issue an Writ of Execution. A Writ of Execution will direct the sheriff to seize sufficient property to satisfy the Judgment and sell it. One of my collection cases involved an individual who owned a boat which he frequently docked at a specific marina. Pursuant to a Writ of Execution, the sheriff’s office removed the boat from the water, chained it to a tree in preparation to sell it. The debtor, not wishing to lose the boat, paid the Judgment in full as well as the sheriff’s fees.
Finally, in those cases where the debtor owns a business, and is operating it in such a way to hide wages and assets, the Court may appoint a receiver to supervise the business and make payments on the Judgment. The Receiver’s fees are paid from the proceeds of the business or sale or assets and reduce the payment to the creditor. The Court considers the appointment of a Receiver as the last resort when other collection methods have failed. Receivers are costly and can lose a business.