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Alan Cohen

A Collections Attorney Can Make the Difference between Getting Paid and Living with an Unpaid Judgment

Law can be a tricky subject, especially to the uninitiated. In fact, the area of law is so diverse that there are different lawyers who concentrate on different areas of law, and seldom if ever, venture out of their domain. When it comes to collections and judgments in Massachusetts there are quite a few things that the layman just can’t understand. Keeping that in mind, this article discusses turning judgment collections into money collections and how having an experienced collections lawyer by your side can ensure you get paid without having to wait for too long.

What is a Judgment?

Before, we can get started on the collections you have to first get familiar with what is a judgment. Well, in short, a judgment is a court order that is the decision in a lawsuit. When a judgment is entered against a debtor, it will provide the debt collection attorney with stronger tools to help get you get paid such as, garnishment of wages to collect the debt.

When entering a judgment, the judge awards the principal amount which he or she deems due, together with interest, costs and where applicable, attorney’s fees. While the person who owns the collection, account is called the creditor, they need to go to court first to receive a judgment before they can try several legal means of collecting the debt post judgment.

Now, that we’ve got that out of the way, let’s get back to getting the judgment debtor to pay you once the court gives a judgment in your favor.

Judgment Collection

So, your hard work finally paid off. You and your collections lawyer have won the case that you filed in the Massachusetts court and the judge or the clerk magistrate in certain default judgments entered a judgment in your favor. Congratulations. But, the defendant against whom you filed the claim still must pay you. That’s because, according to Massachusetts law, just getting a judgment from the court does not mean you’re going to automatically get paid by the debtor that owes you the money.

While you may have been under the impression that the role of your collections attorney is over once you walked out the court room with your judgment, the truth of the matter is, the role of an experienced collections attorney in cases such as these, has just begun.  When allowed by a court, pre-judgment security can set the table for post judgment payment.

If you’re really, lucky, the defendant will immediately pay you whatever the judge or magistrate had ordered them to pay as part of the judgment. Unfortunately, that’s seldom the case when it comes to judgment collections in Massachusetts. Often, the defendant will try their best to avoid having to pay all or even part of the judgment. But, since you will be smart enough to hire an experienced collections lawyer to take care of your situation, your chances of collection will be improved. As the creditor, you will have many options available to you when the debtor refuses to make the payment that the court ordered.

The first one will be to get a writ of execution, the second will be to have a lien placed against any real estate property that the debtor might have. A third option is to garnish the debtor’s wages if possible. Several more options exist such as reach and apply injunctions, regular injunctions, and post judgment discovery potentially leading to the pot of gold. Having an experienced collections lawyer by your side who focuses on judgment collection can help that you get paid.

Who’s a Creditor and Debtor?

You might remember that when the suit was filed by your collections lawyer against the person who owed you an outstanding payment, that person was called the ‘defendant’ and you, the person making the complaint was the ‘plaintiff’. But, after judgment, the names have changed. As the person who made the complaint, and since you were able to get the judgment, you are now going to be called the judgment creditor, while the defendant in this case will be called the judgment debtor. 

Assessing Debtor’s Assets

For a creditor to get paid on a money judgment it is important to first figure out exactly what assets the judgment debtor has. There are two ways of carrying that out. The first is by a post-judgment discovery, and the second is through a supplementary process action. Under the Massachusetts Rules of Civil Procedure, the court has granted lots of power to the creditor for obtaining discovery from the judgment debtor, which will assist with the payment of a judgment. 

The second option of ‘Post-judgment discovery’ can also be used to request for any information or documentation which can be used as evidence of the judgment debtor’s assets. This can also include bank statements, tax returns and previous paychecks. A judgment debtor could also, through this rule be deposed and required to provide all the details, under oath, about their income, investment accounts, bank accounts, inventory or equipment, real estate and vehicles, and any other collectables etc.

According to Massachusetts General Laws Chapter 224, Section 14, during this time, the judgment creditor will also have the right to commence an entirely new lawsuit on the judgment debtor, which solely focuses on obtaining the payment for the judgment. In a supplementary process action, a judgment debtor is required to appear in court and submit to an examination under oath relative to his or her assets and ability to pay.

Attaining a Judgment Payment Using Debtor’s Assets

Once the information is obtained, the judgment creditor has the right to use other legal tools to have those assets satisfy their judgment payment. If it has been found that the judgment debtor owns physical personal property such as vehicles, inventory, artwork or jewelry, then the judgment creditor can obtain a Writ of Execution from the court, which is a legal document, allowing the Sheriff to attach any non-exempt personal property of the debtor and to hold it for sale at a public auction for the purpose of satisfying their debt. For more information see, Massachusetts Rules of Civil Procedure, Rule 69, and Massachusetts General Laws, Chapter 235.

If it’s found that the judgment debtor has got money in a bank account or is receiving a wage, the judgment creditor can then seek a ‘trustee process attachment’ for access to those funds and use them to satisfy the payment the judgment. For more information see Massachusetts Rules of Civil Procedure, Rule 4.2, and Massachusetts General Laws Chapter 246 or call Attorney Alan M. Cohen at 508 620 6900.

While a trustee process attachment is an effective way to get access to the debtor’s bank account, apart from the domestic relations payments such as alimony or child support, courts in Massachusetts are reluctant to garnish wages unless the court is satisfied that all other collection efforts have been exhausted, which is why you need a judgments lawyer who has experience in dealing with judgments in Massachusetts.

If the debtor owns any real estate, then the judgment creditor can levy the Writ of Execution on said property. Even so, the judgment creditor will have several options at their disposal. The judgment creditor can have a sheriff sell the real estate property at a public auction and then use the proceeds to pay out the judgment.

Or, the judgment creditor can simply record a copy of the Writ of Execution with the Registry of Deeds for the county where the judgment debtor’s real estate is located, which is a more common option in judgment cases in Massachusetts. The recorded writ will then act as a lien on the real estate that has to be satisfied before the judgment debtor can sell or refinance the property.

What if Nothing is Found?

It is possible that the judgment creditor is unable to find any asset of the judgment debtor’s which can be applied to the judgment. Supplementary process affords another option to locate the debtor’s assets. Massachusetts General Laws Chapter 224, Section 14, addresses supplementary process actions. As mentioned before, once served with a summons, the debtor is then required to come to the court or else a warrant (capias) will be issued and the judgment debtor will then be brought in by the sheriff. This will be to submit an examination under oath relative to their assets or their capability to pay the judgment debt. In this case, the court will then enter a Payment Order, which is based on their findings of the examination.

This will require the judgment debtor to make a single or recurring weekly or monthly payment, or a periodically payment. A review is often scheduled at quarterly or biannual intervals. The payment review hearing can be set up periodically, which is usually every six months to ensure if the judgment debtor’s financial situation and their ability to make their payments have changed. If the judgment debtor fails to comply with the order of the court regarding the payments, then they can be held in contempt.

Notification of Received Payment

Once the full amount of the judgment has been received by the creditor, the Execution is returned to the underlying court marked satisfied in full. If you can’t find the original execution your experienced commercial debt collection attorney may also choose to use either the Acknowledgment of Satisfaction of Judgment form or the Acknowledgment of Satisfaction of Judgment on Counterclaim form to notify the court.

When a Lawyer files suit to collect a debt, it always gives the creditor the advantage if the Lawyer can obtain either a bank account attachment, real estate attachment, or some other “pre-judgment” attachment that will assure the creditor that if a Judgment is entered in their favor, that there is some asset to seize upon to satisfy the Judgment.

Therefore, it is always crucial to make the necessary copies of checks that are received from businesses you are dealing with. A copy of the check can be given to your Lawyer, and depending upon the State you are in, the Lawyer may be able to obtain a Court ordered attachment of the bank account. If the Debtor owns real estate, the Court may be able to order an attachment of the real estate.

In Massachusetts, the Court has the authority to appointment a “Keeper.” This is an extremely effective tactic, especially if the business that owes you money is a business that takes in cash. The Keeper then is given the right to receive all the cash that comes into the business during their presence, up to the amount ordered by the Court.

For instance, if a business owes a contractor or supplier $20,000 for equipment sold and delivered, which refuses for unjustified reasons to pay the bill, the supplier’s Lawyer could seek a Keeper appointed. This is another reason why it is so important to hire an experienced lawyer who has dealt with similar cases before and can help you out by striking while the iron’s hot. If the lawyer is able to persuade the judge to allow the appointment of a Keeper, then the deputy sheriff can use the Keeper attachment to go to the  restaurant on a Friday night and seize all cash that comes in the door, which means that either the restaurant owner keeps the restaurant open during the weekend, or closes it, to evade the Keeper. The Keeper attachment is only effective in cash environments. The sheriff cannot keep credit card payments. That is attachable by reach and apply injunctions.

In some cases where the creditor is having problems with getting a judgment debtor, by just placing the Keeper in the business, the claim will get resolved.

Ending Note

To find out more about the different ways in which we help our clients collect unpaid judgments in Massachusetts, please feel free to contact Law Offices of Alan M. Cohen LLC, today at www.Collections-law.com, or contact us at 508-620-6900. You can also email us at alanmcohen@collections-law.com.

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