Judgment Collections

Judgment Collections In Tulsa, OK

The prevailing party in a lawsuit for debt collection “wins” a judgment. This judgment only reduces to writing the Court’s ruling that money is owed by the debtor to the creditor. There is no guaranty of collection.

The judgment is issued by the Clerk of the Court and this process may take weeks. In some jurisdictions, this process may take months. When the judgment is issued, it is recorded at both the State and the County levels where the debtor lives and/or owns property.

The decision regarding the collection process begins now.

In most cases, a debtor agrees to enter into a payment plan without a court-ordered collection procedure. These procedures are a bank levy or a garnishment. It is most common for a creditor to rely on a recorded judgment for eventual payment.

Below is an overview of each of the three collection approaches.

  • Bank Levy

This type of court-ordered collection allows the creditor to receive any funds in an account of the debtor on the day the levy is issued. Not only must the creditor know the actual bank branch location of the account, but the levy is effective for the day of its issuance. The levy cannot be extended to subsequent days.

Effectively, the creditor needs luck to levy the account on a day when there is a large balance in the account. If there is a low balance in the account on the “levy” day, or if the account is closed, then another court-ordered levy must be obtained.

  • Garnishment

A garnishment against the wages requires the debtor’s employer to withhold a set amount of wages from each paycheck. The withheld wages must be submitted to the Court on a monthly basis for the ultimate payment to the creditor. There are laws that limit the amount of wages that can be garnished.

If a debtor owns a business, the payments for products or services can be garnished. Like a wage garnishment, collection of cash from the business will be ongoing until the debt is satisfied.

  • Effective Lien

Often, creditors will rely on the lien that is effectively placed upon any property owned by the debtor in the County where the judgment is recorded. Eventually, a debtor will sell the property and, at the time of the sale, the proceeds will first be applied to satisfy the judgment. The property cannot be sold until the judgment is removed from the public records.

In each of the above options, there is considerable expense in obtaining a court-ordered collection process. The costs expended in obtaining a collection process are the actual fees and the value of the time expended.

It takes a considerable amount of time and money to obtain the pertinent information regarding the debtor’s place of employment and the bank accounts.

Unless there is a considerable amount of money known to be located in an account on the day of the levy, or if a debtor has a high-wage job, the costs involved in obtaining a court-ordered garnishment or a levy are not worth the end gain.

The creditor, and its attorneys, will carefully weigh all of the information obtained on the debtor in the decision of whether to move forward with a formal collection procedure. The amount owed must justify the time and the out-of-pocket costs expended to achieve this end.

Often, a payment plan with the debtor is the most efficient and cost-effective.

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