How to Collect a Judgment - Lehto's Law Ep. 5.34

hello welcome what's in the lato slaw

I'm Steve Leto a couple points of

interest first of all I've got to tell

you a top row behind me the microphones

number one eight and nine from your left

to right we're just donated to me by a


thanks a lot Greg for those they add

wondrous things to the collection and

second of all today's topic comes to us

from Pete who asked me Steve if I've got

a judgment against somebody how do I

collect it and he indicated that he

might have a reason for asking that

question I suspect that he or someone he

knows has a judgment which they would

like to collect and I can ask this

question a lot because if you want to

you know sue somebody get your money

they owe you money for some reason suing

them and winning is only the first step

now the next step is where you try to

collect the money based on the judgment

but it can be difficult it might not be

difficult it depends what kind of defend

that you're dealing with so for instance

General Motors Ford or Chrysler who I

sue all the time I lemon law claims pay

me okay

in fact most my cases settle so long

before I get a judgment it's not even an

issue okay but there are occasions where

you get a judgment against somebody it's

a piece of paper from the court that

says yes this person owes you money and

the court will enforce this debt if need

be and that's the important thing to

remember is the judgment actually comes

with the force the courts behind it so

like I said we're not gonna talk about

how to get the judgment I've talked

about that before different context but

once you've got the judgment you've got

a piece of paper from the courts as

judgment it's in your favorites against

somebody else and and I've mentioned

before also that that some of the most

disappointing things in my career were I

got judgments judgments against

uncollectible entities and by entities I

mean I sued a corporation the

corporation went bankrupt and the

corporation bankruptcy got the judgment

discharged so my clients got nothing

I've also had it happen before my

clients got something but they got you

know 50 cents in the dollar instead of a

dollar on the dollar so the first thing

you remember is the moment you get a

judgment okay assuming it's collectible

the the interest meter is running on it

so if you get a judgment against

somebody and it takes a while for you to

collect it you're gonna get you're gonna

get you're gonna post-judgment interest

on that judgment so they owe you ten


and takes him a couple years to pay you

you're gonna get a substantial amount of

interest if in fact you get them to pay

everything but you have to I'm not gonna

get into the math here but you actually

to calculate this out and figure out

what the interest is at any given point

in time

so you do get to collect the full amount

your judgment plus interest so there are

now the obvious question arises well how

do you get someone to pay you okay and

once in a while someone will chime in I

want my videos and go well the key here

is that you simply make yourself

judgment proof as as if there's some

like switch you can flip and make

yourself judgment proof and it is true

that some people are very very difficult

to collect from but it's almost

impossible in our day and age to become

judgment proof so the first thing I

remember is judgments actually last for

10 years if it's gotten in small claims

court it might be a little shorter but

but quite often a typical judgment is

good for 10 years and the other thing is

to remember that at the end of the 10

years you can go into court and get it

renewed so in theory if you've got a

judgment against an individual you can

chase him for 20 years if you want to

you know so leave it hanging out there

most people by the way when they get a

judgment against them if they think

about it they realize oh wait a second

this judgments going to destroy my

credit so it's in their best interest to

pay it off but let's assume that you got

a judgment against somebody it's an

individual and they haven't gone

bankrupt and they just simply don't want

to pay what can you do so believe it or

not there's a couple things you can do

with the court where the court will help

you try to collect the money that

someone owes you so the first thing you

can do is you can you can drag the the

the person owes you the money into court

for an examination okay and and by

examination you're gonna get to ask them

the questions under oath okay

and so there's there's a form for that

it's it's a it's actually a subpoena and

and you simply check the boxes on it

that you're doing this you know asking

someone to come in and testify about

their assets and you actually fill the

subpoena out you get the court to enter

it and they give you a true copy and

then you have to have this haven't

served on the person that you have the

judgment against keep in mind that you

cannot serve the judgment yourself if

you're a party to the case that the

subpoena arises from

and it can't be an interested party it's

got to be a competent adult sometimes

you just had the court do it for you

processor it's gonna cost you a couple

bucks but you know it's probably worth

it and then you drag that person into

court and make them testify about their

assets you can ask them where they work

where they bank what assets they have

what things they own you can sit there

and poke at them and ask all these

personal questions about where they've

got their money if they've got their

money or whether they've got their

assets I can tell you right now that I

brought somebody in for one of these

exams and asked them where all their you

know where all the banks were what their

bank account numbers were and then the

next day issued a bunch of garnishments

on those banks to get the money you know

that's one thing you can do if you find

out what somebody works you can garnish

their wages and again you get a form

from the court to you know warm for

garnishment when you get it into the

court you send it to the employer the

employer then files a report back is

that much as a person makes and then

they can take a percentage out and

you'll you'll get these periodic

payments you can also subpoena and

actually seize their tax returns if they

actually get money back in the tax

returns another form you can do for that

so that's actually you know another

standardized thing you can do so one of

the things I have to let people know is

that if you think your judgment proof if

you're sitting there listening he's

going to Steve I'm judgment proof okay I

I don't put money in the bank I've got

it all on a shoebox underneath my bed if

you ask me about it I'll deny that it's

there so you'll never know it's there

and I for a guy who pays me cash and and

if you ask them I work there he'll deny


and I make so little money that I don't

get money back from the feds and

basically off the grid how can you you

know what can you possibly do well one

of the things you can do is you can drag

the person for creditors exam find out

where they live

ask them about stuff they own and then

you get a writ of execution on their

property and a route of execution and

property is again a document you fill

out and you take it to court the court

enters it and assigns it and then you

get that writ you give it to a court

officer or a sheriff's deputy who's

licensed and authorized and bonds it to

do these things and I've done this

before I've done this many times and in

fact I've had a couple defendants who

just absolutely refused to pay any money

and so I get the writ of execution and I

stick a court officer on him and I

actually got to know one of the court

officers very very well we did a bunch

of these for me

and his name is Vic and I remember

sending the paperwork over to Vic and

about a week later he calls me and he

goes hey Steve I'm standing on this

guy's front porch right now he's crying

do you want to talk to him and I go sure

do you think it'll help

next thing an old guy gets in the phone

it goes hey mr. lado there's a court

officer here who's threatening to take

my car and I've got a couple cars and

he's threatening to take one of them and

how do I make him go away

and I said well can you give him the

money for the judgment instead of giving

him your car and he goes well if I can

go to the bank yes so I go hand the

phone back to Vic

so they hand the phone back to Vic Vic

goes what's going on I go he's gonna go

with you to the bank and cut you uh some

kind of cashier's check or money order

or something that's good instead of

letting you take his car and if it goes

ok cool you know that's it so the point

is that if the court officer shows up at

your place and since I've got a writ of

execution against your property you're

allowed to exempt some of your property

from execution but not all of it and if

you've got a bunch of stuff the court

officer could haul it all off and what

he does he hauls it off he auctions it

and then he takes the money from the

option to pay himself and then to pay

towards the you know reducing of the

debt and the judgment and the bad news

for you is that when something gets

seized in that kind of an auction

setting and gets taken to an auction and

sold that's the worst kind of auction of

your stuff sold at because people go

what see the stuff was seized by a court

officer we don't know if it runs we

don't know the clean titles we don't

know anything about it so you're going

to get literally pennies in the dollar

and I actually had a business I'll just

say in Detroit that was obstinate

meaning that they refused they refused

to respect the fact I had a judgment

against them and I contacted their

attorney and their attorney because my

client doesn't want pay and I go well

you understand what a judgment is right

him you're an attorney all right he goes

my clients not gonna pay this and I said

well you know I don't know that was

their bargaining position like you know

hoping that I come back and say well

we'll take less

but I said well you know if it's gonna

get ugly is gonna get ugly but I you

know I'd rather use cut me a check and

the guy goes well I don't I don't know

you know what you think you can do but

knock yourself out

well the funny thing about it is is that

post-judgment actions don't involve the

same notices that pre-judgement actions

do so if I'm involved in a lawsuit with

you and your opposing counsel and the

case is going along every time I pass

through the corner kind of file copy

with you so you know what's happening

with the court case but when I file a

writ of execution with the court I just

serve a copy on the defendant and

usually the guy who serves its my court

officer is also executing on it and I've

actually had my guy call me up and say

Steve I'm gonna go execute in that

judgment tomorrow and I say okay and I

and I just stay by the phone and wait

for the inevitable phone call and I

almost always get a phone call from a

defense attorney and I remember the

particular case I'm thinking of the guy

calls me up screaming at me going I

can't believe you're executing on a

judgement I said well you really want to

told me your client wasn't gonna pay and

he goes well yeah I know but that's

negotiation let's let's let's you know

let's negotiate as well you know it's a

little too late now because my guys at

your guys place apparently executing

right now hauling off stuff and my court

office had brought a u-haul and was

emptying all the equipment out of this

guy's shop and my guy is free you know

it might my opposing counsel is freaking

out going but my guys can get a business

and I said that's not my problem

I don't think and see here's the thing

it's always better people cooperate with

you something calls you goes okay oh you

the money I'd like to work something out

can we work something out the court

actually allows most individual

defendants to go into court and get a

payment plan to protect them from the

person's got the judgment against them

so if you get a judgment against an

individual okay and you're thinking

yourself should I execute on their stuff

or or you know one thing you disc a look

we are you willing to make payments just

something to indicate that you plan on

paying this because if if you just

ignore the judgment and you know ten

years from it will expire if you don't

renew it so you want to take steps and

action on this thing and so if you if

you asked somebody are you willing to

make payments if they're willing to make

payments let them make payments you know


make payments and they're making

substantial payments it makes sense and

I've seen it happen a lot of times where

somebody says hey look you know I can't

pay you the ten thousand now but I can

pay you you know five hundred bucks a

month so I'm paid off interest is

running on that if you want to do it and

you know if you think that's the best

way to get the money do it you know but

like I said when when when the attorney

called me from the defense you know on

behalf of his client whose stuff is

being hauled into u-hauls right now I

don't have a lot of sympathy and I just

say well you know can you guys cut a

check right now for the full amount of

the judgment they go no and I go what

what could you come up with and I always

you know the I've had attorneys goal

will you stop your guy while we're

negotiating a know some of the best

negotiating tools I can possibly have

I've got a sheriff's deputy at your guys

place of business hauling out all of his

equipment it's gonna put him out of


maybe this will motivate him to pay me

you know who knows and I and I've and

I've had that happen more than once so

you know like I said you can execute on

their property you can garnish their

wages you can garnish their tax returns

and all of these things can be done and

there's a variety quark forms you can

get on this the cool thing is that all

these court forms are online now at

least in Michigan they are I've heard

from people in other states there's a

couple states out there that don't have

their laws online and don't have their

illegal forms online and that's a very

sad situation because I think nowadays

with the internet it's so easy for a

state to put all that stuff online put

the laws online so you can read them put

all the forms online so you can fill

them out yourself and you know whenever

I go to print out a form I used to have

a disk that had all the forms on it I'd

actually load the disk into my computer

and download the form and nowadays it's

it's faster for me just to search it

online and pull it up and fill it out of

my screen it's in you know so that's

that's what you do but all of this stuff

is pretty straightforward but the key is

the key is that there are ways that you

can get this money and you can get

someone to pay you and if somebody and

again like I said I know I'm gonna get a

couple comments people saying Steve I'm

judgment proof and I'm planning on being

judgment proof for the next ten years

well it's kind of like a cockroach

bragging about its longevity okay and

cockroaches apparently can withstand

many many things but I

no I want to live the life of a

cockroach and so the question is the

life you live as a person who is

judgment-proof means that you can't use

bank accounts you can't have a regular

job you can't get tax or you know

refunds and you can't have any assets of

any real value because any assets you

acquire you know things you know we can

execute on those things and every now

and you hear a funny story and and the

one I'll tell you and I won't get too

greatly into details because there's so

much of it is online but there was a

Tigers pitcher for the Detroit Tigers on

him Denny McLain he's the last pitcher

to win 31 games in a year and in his

prime he was just insanely good and

unfortunately after he got out of

baseball he fell on hard times by that I

mean with legal problems he spent some

time in prison ran into all kinds of bad

business dealings and he wound up

getting sued a bunch of times and I

remember seeing an article paper not too

long ago were people were out there at

his house executing against his property

because somebody got a judgment against

him that he hadn't made good at that

moment in time so go online look that

stuff up I'm not making it up and every

now and then you hear about these

stories where somebody you know didn't

pay a judgment or they didn't keep track

of a judgment next thing you know the

sheriff's deputy is showing up going

we're here to take your stuff so you

have to be aggressive if you wait for

someone to pay you they might think

you're gonna go away ten years down the

road you may have to go away if the

judgment expires now like I said you can

renew it but again you should take

action on it and I've discovered that

when somebody gets judgment against them

you've got to wait for 21 days

usually the period of the appeals period

yeah gotta let that run to make sure

that can appeal it but after 21 days you

can start executing us of I see on day

22 go after him let him know that you're

not gonna just roll over the way from

the throw money at you and you know it's

interesting I'll give you one last life

lesson here I served a guy with a

subpoena to show up for creditors exam

and the creditors examine that

particular court had to be conducted at

the courthouse so I went the courthouse

checked in with my client and the

subject of the creditors exam who had

the judgment against who never showed up

and the judge calls the case and I stand

up again Your Honor I'm here but the guy

who owes the money isn't here the judge

goes okay I'll issue a bench warrant for

his arrest and so a bench warrant got

issued for the man's arrest because he

didn't show up for court and that thing

to show up says you know it's an actual

court order to show up and on a Friday

afternoon about four o'clock about three

weeks later I got a phone call from a

court clerk who goes Steve your guy

identified in that subpoena just got

pulled over for a routine traffic

violation and when they ran his license

they found the outstanding bench warrant

from our court and he got arrested on it

he's sitting in jail right now and I

said okay and she said do you want to

take his creditors exam and I said of

course I do and she goes okay well the

earliest we can get to him is Monday how

his Monday sound for unison money sounds

good for me and she was okay the guy sat

in jail Friday night all day Saturday

all day Sunday and a couple hours on

Monday they brought him to the


I took his exam then he left I spent

three days in jail now he didn't spend

three days in jail because he owed money

he spent three days in jail Exige nor to

court corner but I realized that maybe

you weren't going what's the difference

well that's what happens and in case

you're curious

during that exam I found out where he

worked I dropped the thing on his

employer and said how much money does

the guy make and there's a formula and I

started getting checks periodically

every time that guy got a paycheck we

got a check do the math subtracted out

boom boom boom it was a accounting mess

but we got our money eventually but like

I said some guy spent three days in jail

so the key is to be aggressive you can

do this stuff and if you're confused you

can actually go online in fact if you're

in Michigan type in how to collect on

your judgment and you'll get a state

pamphlet on it where it says collecting

your money from a small claims judgment

but it's the same thing small claims

regular whatever you've got a judgment

against somebody there's steps you can

go through collect all eight up there

the forms are laid out there and this

can be done without an attorney whether

you should or not yeah you know I you

gonna have to contour and get a couple

questions cancer for you quickly I walk

through people peoples is all time but

it's fairly easy to do but you

gotta be aggressive and you got to do it

so that's how you collect money on a

judgement thanks for watching thanks for

listening bye