I won and I am owed money, what do I do now?

Updated: Apr 26

If the other party owes you money as part of a judgment, that makes you the judgment creditor with the other party being the judgment debtor. As the creditor, you have different options depending on how the debtor responds to the judgment.

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Debtor pays voluntarily

If the debtor pays you voluntarily, that's great news. However, as the creditor, there are a couple of things to take into account depending on how the debtor chooses to pay.

Debtor pays you directly

This is great news—once the debtor has made all the payments as promised, you as the creditor will need to file a completed acknowledgment of satisfaction of judgment form, and remove any liens placed against the debtor's property. The form tells the court that the debtor has done what is asked on the judgment and no longer owes you anything. Consider doing this promptly as required by local laws, otherwise, the debtor can sue you for damages for not following the required steps after the judgment has been satisfied.

Debtor arranges to pay the court

A debtor can choose to pay the judgment directly to the court (if allowed by the court). The advantage for the debtor is that they can get the proof of payment from the court and have the court indicate that the judgment has been satisfied. If the court has received payment for the judgment, they will notify you directly that the judgment has been satisfied. You will use the notice received to request the funds from the court. Note that you must claim the money within the time limit defined by the court, otherwise the money will become the property of the court.

Debtor arranges to pay in installments

If the debtor cannot pay the judgment all at once, they may request to set up a payment plan with you or with the court.

  • Debtor requests to set up a payment plan with you: This is an agreement between you and the debtor exclusively. If you do come to an agreement, make sure all the details are in writing, including but not limited to: due dates, interest, how to send the payments, and what payments will be accepted. If the debtor does not follow the details set forth, you can sue them for breach of this contract.

  • Debtor requests to set up a payment plan with the court: The debtor will fill out a form to request to make payments, along with their financial statement to prove that they can't pay in whole. You will receive a copy of these in the mail, along with a response form. You have a deadline to return this response form to the court on whether you want to accept the payment plan terms.

o If you do not respond within the deadline, then the court will assume you have accepted the terms requested.

o If you respond by rejecting the request or requests changes, the court will likely hold a hearing to discuss the request and make a decision.

Debtor does not pay voluntarily

Debtor tells you they will not pay or Debtor does not pay within 30 days of the judgment

If the debtor does not pay you, you will have options to collect from the debtor. You will have to wait 30 days before you start collecting. The debtor will also have those 30 days to appeal the decision.

We suggest you start by formally asking the debtor to pay you the money. You can do so by sending a formal Request for Payment letter, which is similar to the Demand Letter sent prior to filing a lawsuit. This letter provides details to the debtor on how they can pay you, and what you will do if they choose not to pay.

If the debtor still does not pay, then you will need to follow the next steps and begin the collection process. The collection process involves different methods of getting money from the debtor through their assets, such as their salary/wages, properties, or money in their bank accounts These first steps are to help you get clarity on what assets the debtor has that may be available to be used for paying off the debt to you.

  • The law requires the debtor to fill out a form stating their assets, which will tell you what may be available to pay your claim. If the debtor does not fill this statement of assets out voluntarily, you can file an application to have the court compel the debtor to produce it.

  • You have the option to ask that the debtor appears in court to answer questions about income and property. This is an option even if they send in their asset statement voluntarily; if they don't, then the application to have them produce the statement of assets will also request that this hearing take place.

Once you have the information about the assets, you can start the collection process which will include different options depending on what assets the debtor has.

Debtor appeals the judgment

If the debtor chooses to appeal the small claims judgment, they will have to do it within 30 days of the judgment. An appeal is essentially a new trial, so the case will be decided by a new judge from the beginning. If the debtor files an appeal, you will be notified by the court of the new hearing date.

Keep the following key things in mind if the debtor does appeal:

  • Bring all evidence to the court as you did the first time, and be prepared to tell the new judge your story again, as the judge does not know what happened in the first trial

  • Both sides are allowed to bring a lawyer to represent them in an appeal, so if you know the other party will be bringing a lawyer and you feel more comfortable with one, we suggest you look into bringing one as well

  • If you can prove that the other side filed the appeal in bad faith with the intention to harass or delay, the judge could award additional damages to you

  • You can request attorney fees, lost earnings, transportation, and/or lodging costs be awarded, so be sure to bring that up during the appeal hearing and show the receipts

  • Debtor requests cancellation of the judgment

The debtor can only request to “vacate” or cancel the judgment if the judgment is a default judgment, meaning the debtor did not attend the original hearing. If the debtor files this request, you will receive notice of this request with a new hearing date. The new hearing will be a chance for the debtor to explain to the judge why they did not make it to the original hearing. If the judge deems the reason acceptable, then a new hearing will be awarded (either on the same day or at a different hearing).

Keep the following key things in mind if the debtor does request a cancellation:

  • Bring any evidence that could refute the debtor's reason for not attending the first hearing. If the judge does not deem the debtor's reason sufficient, the default judgment will remain (although the debtor can appeal this denial of motion to vacate)

  • Bring all the evidence to the court as you did the first time, and be prepared to tell the new judge your story if the default judgment is canceled

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