Collecting a Judgement?

rk2z asks: "I did some independent contractor work about 6 months ago. I delivered the software as specified in my contract and turned in the hours that it took. I then sent the company an invoice for $1400 which was based upon my contracted hourly work rate. They had paid me in the past so I didnâ(TM)t do anything like withhold source code until payment. To make a long story short, they refused to pay me and I ended up taking them to Small Claims court in the state of Nebraska. I won a judgment for the above amount. The problem is, Iâ(TM)m not really sure how to go about collecting my judgment. The amount is relatively small so I donâ(TM)t want to consult a lawyer, because it not really worth blowing the entire judgment before I even get it. But it's big enough that I donâ(TM)t want to give up on it."

"I looked a couple of law websites like here and here, but their suggestion were fairly broad.

Does anyone have any experience in going after debtors (without a lawyer if possible)? Is it better to go to a collection agency and blow half the settlement up front? If so does any one know a good collection agency?

Things to keep in mind: [the customer] is a small company (less than 7 employees). They have some property like computers and such, but how do I find out what they own vs. what is leased. Owned property can be seized by the Sheriff and sold at auction. I have tried to contact them about a monthly/weekly payment plan, but have been blown off every time I try to make some progress on the issue. Thanks in advance."

Comments

Take them back to court

[MrResistor]

If they haven't paid you then they haven't fulfilled their side of the contract, and they don't own (or otherwise have rights to) the code you wrote. If they're selling/distributing the code that could be a big problem for them as that would be a violation of your copyright, and damages for that are up to $150k per violation. Wouldn't they feel stupid for not paying you that $1400?

I think I would just talk to the Sheriff, though. I very much doubt that you have to know ahead of time what equipment they own or lease. That's the sort of thing that can be sorted out after it's seized.

You might also want to contact a credit reporting agency to see how you can put a black mark on their credit report.

Re:Take them back to court

[spumoni_fettuccini]

Also you may want to try the better business bureau and see what resolution they might be able to provide. Check in your area for mediators, as they may be able to help settle the payment of what you are owed [any legit company would really like to settle/pony up rather than face bad PR]. If you know a Guido or Vinny that may help as well. ;)

Re:Take them back to court

[MrResistor]

What's to stop the court from saying "This is a contract dispute, not a copyright dispute, because the contract didn't specify that all rights stay with the author until final payment. The contract issues have already been litigated and resolved, so I'll dismiss this, clear my calendar and look efficient"?

Because by default the copyright belongs to the person who actually wrote the code. The only way that can be changed is through a contract, and if the customer hasn't fulfilled their part of the bargain, the contract doesn't mean jack. Quid Pro Quo is the basis of all contract law, and it means they can't ask you to give something up without giving you something in return.

The contract issues have been litigated, but they haven't been resolved, and that's exactly the reason it would be going back to court.

Really, having the Sherrif go in and seize some of their stuff for sale at auction is the best way to go, since that's already specifically allowed for in the ruling. If he wants to really shaft them he can try to have the contract declared null and void due to their non-payment and go after them for copyright violation, but that's more hassle than I think I would want to deal with, and definately requires a lawyer. Another option is to go with a collection agency, but I think I would go back to court first in order to have the cost of using a collection agency added to the damages, although I expect that would have a good chance of being dismissed.

Then again, I would have asked for more than $1400 in the first place, at the very least adding the court costs (small claims is cheap, not free) and billing for the time spent persuing payment at the contractual rate, including an estimate of the time spent in the court room. After all, they've made that a cost of developing for them, and they should pay for that. I'm betting that would have just about doubled the damages, which would have basically payed for the collection agency.

Then again, I have the benefit of seeing my dad deal with these kind of things, so I've learned to anticipate these kinds of issues.

Other options for going back to court are to attach their income (probably called something else in this case, basically having the money taken directly out of their account and they don't have a say in it) or freeze their bank accounts or put a lein on the business. There are all kinds of fun things you can do.

Non-court options are the Better Business Bureau, which someone else mentioned. I like this one personally, my wife complained to the BBB about the dealer we bought our first car from, who kept jerking us around and trying to change the contract, and the next day the manager was calling up ready to clean the soles of her shoes with his tongue in order to resolve the problem. But then I live in a state where the BBB is actually effective, so YMMV.

I also like the idea of putting a black mark on their credit report, and I'd probably do that regardless of whatever else happened. That can be death for a company that small, as often the only way they can grow or even survive through slow periods is by having the ability to borrow money.

Try this

[cybermage]

My mother went through this to collect back rent from a tennant:

After securing a judgement, ensure that they're are notified of the judgement and given a small window of time to pay. After that, engage the services of the county sheriff where they are located. Sheriff's have the authority to seize property to settle small claims judgements.

They May Be Liable for Legal Fees

[TheWanderingHermit]

I know you don't want a lawyer, but face it: lawyers are paid for things like this because they know more ins and outs than you'll ever know.

For example: You want to attach or seize property. Didn't it occur to you to seize their bank account? (I learned this from a lawyer friend.) They've paid you before. Do you remember their bank? You could actually have the funds in their bank account seized. Then you wouldn't have to worry about equipment and selling it to recoup fees.

Another point: In many situations like this, if you hire a lawyer to attach, seize, or garnish their account, THEY can be held responsible for legal fees. Think of it: They don't pay, you sue, they ignore it, you hire a lawyer, the lawyer seizes not only your fee (plus, in VA, you can get upto 9% interest per year), but the lawyer's fee is also seized and deducted from their account.

If this works in your state, then you walk away with your fee and free legal service. They pay your fee and the legal fees for the lawyer that you hired!

Do this

[cpt kangarooski]

Read this part very carefully: This is NOT legal advice. I am NOT a lawyer, much less a lawyer licensed to practice in your jurisdiction.

Furthermore, I have no idea what Nebraska law is like. So there will be things that are different than how I've described them here. Possibly there are additional steps you need to take, or additional things you need to do.

So don't rely on this.

Here we go:

You have a judgment. You need to execute that judgment. Because right now the judgment alone is just a pretty piece of paper. All you are right now is an unsecured creditor. Little more than scum, in the greater scheme of things, no offense. You need to act to raise your status!

Go to the courthouse, find the clerk of courts, and get a writ of execution (aka a writ fi. fa., or writ of attachment).

The writ is an order by the court to the Sheriff ordering him to go find property owned by the debtor that is not exempt from execution (such as the clothes on their backs, were the debtors individuals), take it, sell it at auction, keep enough money to handle their own costs, give you however much is left until you have all you were owed, and then the surplus goes back to the debtor.

Basically, once you've gotten the writ and the sheriff has recieved it, he'll go out there one day in a pickup truck and start taking stuff. Find out when he's going, and go along, so that you can pick out good stuff that is sure to sell at auction for enough money. But make sure that you don't pick out things that are exempt by law; you may need to do some research on Nebraska law to figure this out.

BE AWARE that sheriff's auctions hardly ever get the full value of whatever's being sold. You may want to find something that you PERSONALLY want, have it seized, then buy it at auction, likely for whatever price you were owed. Then use it, or sell it yourself, or whatever.

Note that some property is difficult to load in a pickup truck -- land, for example. Don't worry if the sheriff merely declares that he has executed on it, and maybe tapes on a piece of paper to that effect. It's legal, and the debtor will get in serious trouble if he fucks with that property (selling it or damaging it), including, e.g. contempt of court.

HOWEVER, if the sheriff can't find anything, he will report back to the court (on a document called a return that lists whatever he finds) 'nulla bona.' (at least if he has any respect for tradition)

Anyhow, once the sheriff got something, you are now a judicial lien creditor BUT IN THAT PROPERTY ONLY. Otherwise your status is unchanged.

PLUS there are even more fun things you can do.

Instead of bothering with the writ fi. fa., you may be able to take advantage of your state's turnover statute. This dispenses with the sheriff and is a court order directing the debtor to just give you property in his control, even if not in his posession. And since you can use discovery rules in this process, you can make him tell you, under oath, with penalties for perjury applicable, as to what it is he's got.

If there is real estate in the county, you might be able to have your lien recorded in the county courthouse. This might also be called abstraction. It places a lien on the real property in the county (NOT personal property; that is, land, not pick-up-able stuff). This prevents him from selling it, since anyone who bought it later, until you're paid off, would basically wind up having to pay.

Or if negotiations haven't entirely broken down, you could offer to trade your judgment for a security interest in some specific property (you will be much more likely to want a lawyer for this, as all the p's and q's HAVE to be minded) which basically means you'd have a much stronger claim.

Since, if the debtor goes into bankruptcy, you're in serious trouble. You DON'T want that to happen. It will totally fuck you up.

Additionally, ACT FAST. There is a sort of pecking order. Firstly, sold property pays court/sheriff's expenses.

Re:Do this

[Anonymous Coward]

I never see "I'm not a Java developer, so don't rely on this...So why the double standard for legal advice?

Because it's not illegal to give programming advice without a license.

Re:Do this

[Naomiah]

There is actually a reason everyone qualifies their legal expertise. That is because it is actually illegal to give legal advice unless you are a member of the bar, and people get prosecuted for it all the time.

Even after I graduated law school, it was still illegal for me to give legal advice, until I received my bar results, and was sworn in.

Nowadays, I know that part of the reason for the bar is to control the legal market, like a license. But it has always been true that you had to pass a qualifying exam of some sort, even just an oral one. Also, there have been lawyers for a long time, so there is a bit of a secret handshake aspect to it, I am sure.:)

Re:Do this

[GreyyGuy]

Because you can be sued for giving faulty legal advice. I'm sure that there are logs somewhere that could be traced back to you. I'm sure you feel nice and cozy in your annonomous would, but then I'm sure those poor shmucks that use Verizon and were caught trading files felt that way too.

writ of garnishment

[angeles13]

IANAL

I have gone through small claims court in Arizona. I have won twice. The difficulty is in the collecting. In the first case, no problem. The second case I am still trying to collect on. Fortunately I have the bank account information and in Arizona, I am able to garnish the bank account (except for a certain ammount) for what is owed. It took hiring a private investigator to find out what happened with the case (county recorder's office lost the paperwork -- keep your own copies of everything!!!) Now, I'm back to using the Court Constable for the serving the garnishment.

Try contacting the Nebraska State Bar for information on small claims court for non lawyers. There should also be somewhere an agency for pro bono work for lawyers. In Arizona, it's Community Legal Services - they have a document that explains in plain English what it takes to go through small claims court and how to obtain your judgement (if awarded).

Good Luck!

Sell the debt.

[Anonymous Coward]

I'm making the assumption you aren't planning to ever deal with these people again? (heck, it sounds like too many bridges have been burnt for that already)

In that case, the simplest and easiest way to get your money is to sell the debt to a debt collection agency.

The agency buys the debt from you, and from then on it is their problem. And these agencies are experts at getting their money back.

It's harsh, and it's cruel, and I think personally I would struggle with the morality of it, but if you really want the money, and there's no other way to get it, I know that this system works.

Collecting a Judgment

[ninewands]

Once the judgment becomes final and non-appealable, you get the clerk of the court to issue you a Writ of Execution on the judgment, then take that to the Constable for the precinct in which the company's offices are located. The Writ will cost you about $15 and the Constable's service fee will probably be somewhere around $50.00. The Constable will serve the writ and either bring back cash or seized property, which will then be sold at auction and you get your money from the Constable.

That's all there is to it.

BTW. IAAL

Ask Somewhere Other Than Slashdot

[afabbro]

I don't mean to be rude, but perhaps the local library has better resources than Slashdot. I'd wager that an afternoon spent perusing books on small claims and how to collect would give you all the information you need.

Second, you're not the first person to face this. In fact, it's a chronic problem with small claims judgements. Did you ask the court? Did you ask the sheriff? Did you ask the county clerk? Why would you ask Slashdot before asking real (omigosh! meatspace!) people who are on the scene with you?

Finally, I'd google a bit...30 seconds' work took me to several links on how to collect.