When you reach the point where you feel a judgment is uncollectible, there is one last strategy that you can try. Contact your Small Claims Court (or the court you obtained your judgment in) and obtain the appropriate forms and information to serve your debtor with a Debtors Exam Order (or what it’s referred to in your particular state). Then go to the Stevens & Ricci Resource Center and download the judgment collection letters and generic (sample) lists for both corporate and individual debtors. These lists spell out in great detail each and every asset that your debtor must reveal and document to the court under oath at this Exam.
The key to this technique’s effectiveness is that after you read off then fax to your debtor all of the asset documentation they are going to have to bring into court under oath, they are more than likely going to pay you off instead. Further, you should mention if they don’t show up for the Exam, a warrant will be issued for their arrest similar to an outstanding traffic violation. This can cause them to be taken off to jail the next time they’re pulled over for a traffic violation.
Methods of Use
This technique can be done either verbally or using the letter and attached list of required items – or both. There is a separate collection letter and attached list of assets for corporate and individual debtors. Make sure to use the appropriate set. You will find the most impact is achieved when you speak to the debtor over the phone first then follow-up with a fax. You’ll be surprised how many Judgment Debtors will decide to settle up.
NOTE: If you don’t plan on actually following through with the Debtor’s Exam Order in the event the debtor doesn’t respond to this technique, do not fax or mail the letter and attachment following your collection call.
Using Your County Sheriff to Encourage Payment from your Judgment Debtor
Most judgments go uncollected after being awarded by the court. You’ve tried garnishing banks, assets and wages to no avail. What else can you do?
THE DEBTOR’S EXAM ORDER
Is there a business or individual that embraces the idea of appearing in court to reveal their company or personal assets in the greatest detail? Probably not, and your debtor won’t either. But what’s really amazing, is that getting your county sheriff to help you recover the debt is as easy as follows:
1. Inform your judgment debtor that if they don’t pay, you will have them served with a Debtor’s Exam Order to appear in court to show copies and statements of all property, stocks, bonds, notes, bank accounts, real estate, IRAs, pensions, financial statements, tax returns, insurance policies, and vehicle titles.
2. Mail or fax either the corporate or individual collection letter along with the asset detail list.
3. Follow-up with a phone call.
SEND ‘EM TO JAIL
Don’t forget to mention if they fail to appear for the Exam Order, there will be a warrant issued for their arrest. After the warrant is issued, should they be pulled over for a routine traffic violation, they will not pass go, not collect $200, and go straight to jail.
Once your debtor realizes that the courts will be examining their most confidential business or personal assets, you will be surprised how quickly a check can arrive in the mail.
It is important to remember that this is an aggressive approach to collections and should be reserved for only the most stubborn refusals to pay – an effective collection tool to be utilized with discretion and care.
Tags: Collecting Your Judgment
