Judgment collection: enforce a judgment against a business and what post judgment recovery actually costs

Find an asset, then take it with a writ. In practice that means three moves in order: identify a specific bank account, receivable, vehicle or property; ask the court to issue a writ of execution naming it; and pay a levying officer to serve the levy. If you cannot name an asset, the first move is post judgment discovery instead, because a writ without a target is a piece of paper you paid $40 for.

A business debtor changes the shape of this in two useful ways. Companies are harder to hide than people. There is a Secretary of State filing showing the registered agent and officers, a UCC index showing who already has a security interest in the equipment and receivables, and in most cases a bank account that receives customer payments and therefore cannot stay empty for long. If the business still has customers, it still has a receivable, and a receivable can be levied in the hands of the customer who owes it.

Companies also fail differently. If the entity is a shell with no assets and the debt was personally guaranteed, your judgment may run against the guarantor too, which opens wage garnishment and personal bank accounts. If it was not guaranteed, the honest reading is usually the one the Kaplan Group gives: in the large majority of small business cases the owner has no personal assets or income that could be seized, and a judgment against a dissolved entity is worth what the entity is worth.

The one move that costs nothing and is skipped most often: go through your own file. The checks that customer sent you in better months carry their bank name, routing number and account number printed on the front. That is the single most valuable piece of asset intelligence most creditors already own.

The number quoted across the industry is about 80 percent. It comes from Joe Dickerson writing in the ABA Journal in April 2020, who reported that 80 percent of US civil money judgments continued to be unenforced year after year. New York practitioners commonly cite 75 percent for their own courts.

Worth being straight about the evidence: Dickerson gave that figure from his own professional experience and did not cite a study, and no federal agency publishes a national collection rate for civil money judgments. So treat 80 percent as an experienced practitioner's estimate that the field has adopted, not as a measured statistic. What does corroborate it is a market price. Judgment buyers, who have every commercial reason to be accurate, pay 1 to 25 percent of face value, and reserve the top of that range for cases where the debtor is visibly solvent. If judgments were routinely collectible, that market would not clear at those prices.

Dickerson's diagnosis is worth repeating because it points at a fixable cause rather than at bad luck. He found that of the top 50 US law schools, only three taught anything about judgment enforcement, and he attributed much of the failure to files where nobody followed up on subpoenaed documents and to depositions taken so early that they told the debtor exactly which assets to move.

Less than most creditors expect to start, and the cost is per attempt rather than per dollar recovered. In California a writ of execution (form EJ-130) costs $40 to issue and stays valid 180 days, and the sheriff charges a fee currently set at $50 for each person or organization served. A single bank levy against one bank therefore costs about $90 in hard fees. A debtor's examination adds a filing fee and your time.

The expensive part is repetition. Every failed levy costs the same as a successful one, so three guesses at three banks costs roughly $190 in sheriff fees and returns nothing. This is why the sequence matters: money spent on discovery is what makes the enforcement spend land. It is also why contingency exists. A firm charging 30 to 50 percent is charging you for absorbing the guesses.

Post judgment costs are usually recoverable. California lets a judgment creditor add enforcement costs (writ issuance, levying officer fees, examination fees) and accrued interest to the balance by filing a memorandum of costs after judgment, and post judgment interest runs at 10 percent a year in California. On a $60,000 judgment that is roughly $6,000 a year added to what the debtor owes, which is both a reason to keep the judgment alive and a reason for a solvent debtor to settle.

You can sell it to a judgment buyer, which is a different thing from placing it with an agency. Placement means the agency works the file and keeps a percentage of anything it recovers; you stay the creditor and you carry the risk. A sale means you assign the judgment outright, take a cash price now, and stop being involved.

The published price range for an outright sale is 1 to 25 percent of face value. Final Verdict Solutions breaks it down as 1 to 5 percent for weak cases, 5 to 10 percent where collectability is uncertain, 10 to 20 percent for stronger cases, and 20 to 25 percent or more for premium files, with a closing window of 3 to 7 business days. Buyers concentrate on civil money judgments of roughly $5,000 and up, entered in recent years, and generally will not touch consumer debt or family law orders.

Two practical notes. A legitimate buyer never asks a judgment seller for an application fee, a processing cost or an advance payment; a request for money up front is the clearest red flag in this market. And an offer is useful even if you decline it. A buyer with skin in the game has just told you what your judgment is worth to a professional, which is the honest benchmark for deciding whether to keep spending your own money on levies.

Years, but not forever, and the deadline is a state question. California judgments are enforceable for 10 years from entry and may be renewed before that period runs out. New York allows 20 years on a money judgment. Texas runs 10 years, with revival available if the judgment goes dormant. Florida allows 20. Most states sit somewhere in the 5 to 20 year band and allow a renewal or revival for a further period, usually on a motion filed before the original term expires.

Miss the renewal and the judgment stops being enforceable even though the debt was real and the court agreed with you. This is the single most avoidable loss in judgment collection, and it happens because a file that has produced nothing for eight years stops getting looked at. Put the renewal date in the same calendar as your tax deadlines the week the judgment is entered.

The clock also cuts the other way. Interest accrues the whole time. A judgment that is dead money in year one can become collectible in year six when the debtor buys a building, at which point your recorded abstract of judgment sits ahead of their new lender and the balance has grown by six years of statutory interest.

It is a court ordered appearance where the judgment debtor, or an officer of the debtor company, answers questions under oath about assets: bank accounts, receivables, equipment, vehicles, real property, other income. You apply to the court, the debtor is personally served with the order, and failure to appear is contempt.

It is the strongest tool a judgment creditor has that does not require knowing anything in advance, which is exactly why it should come early. Several states offer a cheaper written version first. New York's information subpoena can be sent to the debtor and, importantly, to the debtor's bank, and it produces the account information a levy needs without an appearance. Written post judgment interrogatories work the same way in other states.

The mistake Dickerson identified is worth avoiding: do not run the examination before you have exhausted the records you can pull quietly. An examination announces that you are looking, and a debtor who is willing to move money will move it in the week after the order is served. Pull the entity filings, the UCC index, the county recorder and your own cancelled checks first, then use the examination to fill the gaps you could not close on your own.