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.

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.