Enforcing a Judge Ruling

[Matt N.]

Dear Biggerpockets members

A section 8 tenant of mine filed a conversion lawsuit against me claiming I was responsible for her missing belongings worth $100,000. I got a lawyer, she lost the case and I asked the judge for judgement ordering the plaintiff to pay my lawyer fees. I received the judges ruling in my favor today. However my lawyer says she’s not a collections attorney to be able to collect the money from the plaintiff. If someone knows what I can do in order to enforce the ruling and recover my expenses please advise. How about having the ruling put in her credit report? Can this be done? How?

@Brandon Turner @Joshua Dorkin @David Greene

[Frank Chin]

@Matt N.

I worked in the Finance and Credit Departments of various companies and have used collection agencies. In our case though, we have volume, which fortunately, I believe, you don't have. They charge fees, in the 30% range based on the amount owed. For creditors lucky enough to have an occasional collection, refer the matter to an attorney that specializes in it.

I see the collection activity from both ends as I owned businesses with employees pursued by collectors, for debts and child support. State law governs how it's handled.

Debtors of this type normally has no assets to seize, such as financial assets, i.e. savings, investment portfolios. The law even restricts the seizure of automobiles and even TV sets. That's why garnishees are often the only way of collecting money from these debtors, and in one company I owned, I have 3 employees under garnishment, 2 for debts, and one for child support.

In NY State, garnishees can only be done on 15% or salary, and for child support, 25%, and only if the salary exceeds a certain amout. But the most important things is only one garnishee at a time, so creditors has to wait in line. For instance, I got a part timer who makes $200/week gross, and the weekly garnishee comes to $30.00. So in a year, the creditor gets to garnishee $1,500 dollars, and if a collection agency is involved, 30% paid in fees. She owes creditors more than $100,000, and one time I was notified by a new creditor with a garnishee, and this creditor is on line with 6 others, and he won't start collecting his debts for another 10 years. She was with me when she hit 70 years of age, retired completely, and moved out of state, and social security cannot be garnished. Depending on state laws, many government payments cannot be garnisheed either, though allowances are made for child support payments. At this point, all the creditors who patiently waited, spent money on judgements will receive nothing.

In fact, I was withholding her salary during the first year I owned the company. Then I looked up the garnishment laws and discovered she didn't make enough to even be garnished, wrote a letter to the marshal and creditor saying her salary will no longer be garnished. Thereafter, creditors would send me a questionnaire annually questioning how much she makes.

When I was with major company, people with garnishees often change jobs, you'll have to track down the new employer, and get a new garnishee. Or they start working completely of partly off the books. So chasing after these people is more a matter of principle, than actually recovering what's owed. 

Oh, just to mention my employee owing creditors $100,000 decided to lease a car in retirement because if creditors ever find out she got a new car, they can seize it. She has the money to buy a new car because she was successful in getting after people for slips and falls, collected on a few, but from what I see, creditors didn't catch on. I kept my mouth shut so she won't start suing me. And she is smart enough to have a daughter hold on to monies she received. In one slip and small settlement, I know she got the funds, but promptly transferred to her daughter. Funny she even discussed it with me.

Now if you find having a charity helping the debtor hilarious, I find this women owing $100,000, no one can do anything about it hilarious, and even more hilarious, collecting on slips and falls on top.