Think Post Judgment Collection Before You Even Enter into the Contract
When you enter into a contract with another party, you expect the other party to do what they say they will - to repaint your house, to pay you for the product you send them or to repay the money you lend them. But sometimes they do not. You hire DiMonte & Lizak, LLC, we file suit, and the court enters a judgment in your favor. A judgment is known to the collection bar as a "Hunting License." With it, we can initiate post judgment collection proceedings.
Some post judgment collection tools are familiar. They include wage garnishments and real estate levies. Did you know that a judgment creditor can also seize bank accounts and collect money owed to your debtor by unrelated third parties? Certain assets, such as cash value life insurance, qualified retirement plans and a portion of a home's equity called the "Homestead Exemption" are exempt from claims of creditors, but there are many assets that can be seized and turned over. We need to know where to look for these assets. The most valuable commodity in post judgment collection is information, and the best time to obtain the information is when you both are still smiling and shaking hands - before you enter into the contract.
The best way to obtain this information is to ask for a financial statement. But sometimes it's not practical. Even if you do, the information can become outdated. Another, simpler method may be to just ask questions.
Whether its your first meeting with a new client or service provider, or if you have an ongoing relationship, take the time to ask some questions. If it's a business, find out where they bank, where their office is located, if they have satellite offices or other real estate, who their current customers are, if they have any new projects on the horizon, if they have standing orders or constant work with certain customers, if they have any expensive equipment or vehicles or if they are related to or are a branch of other businesses.
If its an individual, find out where they live, who their employer is, where they bank, if they invest in the stock market or mutual funds, if they have their own business, if they are collectors or have expensive hobby equipment, what vehicles they own, and what real estate they own.
And when you find information, write it down, and keep it where you can retrieve it when you need it. Contact management software on your computer (Microsoft Outlook 7 for instance) can be a great place to keep helpful notes. Also, if you are paid by check, make a copy and leave it in your file. All this information may lead to assets which can be liquidated or seized to satisfy your judgment. Keep in mind the time to have these conversations is before, and anytime during the relationship.
Example: Last winter, our client, a sewer company, repaired a sewer at a municipal building. Our client was hired by another contractor, but that contractor failed to pay. When I called that contractor, he begged me not to contact the municipality, stating that they were a longtime client and he had future jobs lined up. We gave the contractor an opportunity to pay the invoice, and when he didn't, we got a judgment and immediately sent a citation to the municipality and tied up the funds the municipality was going to pay the contractor. The contractor sent us the total invoice price by the end of the week. That was a great ending because we knew where to find key assets.
While these topics may seem intrusive at a business lunch or a first time meeting, most can be easily introduced into the conversation. Besides, people like to talk about themselves and their business, and they also enjoy an avid listener.
A judgment is only a hunting license, but with the right information, and the right attorneys, the hunt will be successful. Please contact your DiMonte & Lizak, LLC attorney if you would like to discuss further how you can implement this technique.