Is it Worth Suing a Debtor With No Assets to Satisfy a Judgment?

Let’s say that you have a contract or a debt, and you threaten to sue the other side to collect on the money that you feel is owed to you. The response from the debtor is something along the lines of: “Go ahead and sue me, I have nothing anyway, you’ll never get anything.”

Is that true? Is it worth suing, and getting a judgment, against a party that has nothing?

The good news is that in most cases, parties who say that they have nothing, do have, or will have, something that can be collected to satisfy your judgment. The bad news is that collecting on that judgment could take a lot of time, effort and expense.

What Kind of Debt?

The first thing to think about is whether your judgment is a consumer, or commercial (business) debt. If it is the former, you have some hurdles, because the law gives consumers numerous exemptions that they can assert, to avoid being collected against.

If it is business or commercial debt, you have some more leeway to collect as the debtor doesn’t have those exemptions.

Long Term Collection

Even if we assume that the debtor really and truly has no non-exempt assets that can be collected to satisfy the judgment, that is just now. You have a right to continue to collect on the judgment, for years to come.

Will the debtor get a better job in 5 years? Will his new business make him money? Will he get an inheritance in 10 years? All of these things can happen and you as the creditor have the right to “check in” with the debtor, and collect on the debtor’s assets as he or she may get them over time.

Bank Accounts

You also have the right, in some cases, to garnish bank accounts. Many people who have no property to collect on will have even just a nominal bank account. And while collecting on a bank account that is a fraction of your judgment may seem useless, it is at least a start, and can often bring a hesitant debtor to the negotiating table to try to resolve the judgment before the bank accounts are garnished.

Recording the Judgment as a Lien

You also have the right to record your judgment, and have the judgment serve as a lien on the debtor’s property. That won’t yield you immediate returns—unless you have a security agreement allowing you to foreclose on or repossess property, the lien doesn’t get you anything in the short term. But if the debtor ever sells any real property, your lien will have to be satisfied before the sale can go through.

You do need to record your judgment in every county in Florida, or at least, every county where you feel the debtor has, and may sell, property. Liens based on a judgment are good for 20 years.

We can help you with your judgments–getting or enforcing them. Call our Fort Lauderdale business lawyers at Sweeney Law P.A. at 954-440-3993 today.

Source:

floridabar.org/public/consumer/tip006/