Collection Options Overview
Not all collection methods work for every judgment. This comprehensive guide compares negotiation tactics, enforcement mechanisms, costs, timelines, and strategic considerations to help you choose the right approach for your situation.
Read the Full Collection PlaybookEducation Only: This content is for educational purposes and does not constitute legal advice. Laws vary by state. Consult with a licensed attorney for guidance specific to your situation.
Understanding Your Collection Options
After obtaining a judgment, you have multiple paths to collect what you're owed. The right choice depends on the debtor's cooperation level, asset availability, judgment size, and your cost tolerance.
This guide breaks down each option with real-world costs, timelines, success rates, and strategic considerations.
Two Main Paths
Work with debtor to structure settlement or payment plan. Lower cost, faster resolution, requires cooperation.
Use legal mechanisms (garnishment, levy, lien) to compel payment. Higher cost, longer timeline, works without cooperation.
Negotiation Options
Lump-Sum Settlement
Negotiate a reduced payoff amount in exchange for immediate full payment. Creditors typically accept 40-70% of balance to close the case quickly.
✅ Pros
- •Fast resolution and case closure
- •Minimal cost (no court fees)
- •Debtor gets discount, you get certainty
- •Avoids enforcement complexity
❌ Cons
- •Requires debtor cooperation
- •You accept less than full amount
- •Debtor must have lump-sum funds
- •No guarantee debtor will pay
Structured Payment Plan
Agree to monthly payments over time (typically 12-36 months). Debtor pays full amount plus interest, you get predictable income stream.
✅ Pros
- •Recover full judgment amount
- •Predictable monthly income
- •Minimal upfront cost
- •Maintains debtor relationship
❌ Cons
- •Long collection timeline
- •Risk of default mid-plan
- •Requires ongoing monitoring
- •Enforcement needed if default
Enforcement Options
Wage Garnishment
Court order directing employer to withhold portion of debtor's wages (typically 25% of disposable income) and send directly to you.
✅ Pros
- •Reliable ongoing payments
- •No debtor cooperation needed
- •Employer handles withholding
- •High success rate for employed debtors
❌ Cons
- •Court filing fees required
- •Debtor must be employed
- •Limited to 25% of income
- •Stops if debtor changes jobs
Bank Account Levy
Court order freezing and seizing funds from debtor's bank account. One-time seizure of available balance at time of levy.
✅ Pros
- •Fast execution (1-3 weeks)
- •Immediate lump-sum recovery
- •No ongoing monitoring needed
- •Can repeat on multiple accounts
❌ Cons
- •Must know bank account location
- •Only seizes current balance
- •Debtor may move funds
- •Separate fee per levy attempt
Judgment Lien on Property
Legal claim filed against debtor's real property. Lien must be satisfied before property can be sold or refinanced. Long-term strategy.
✅ Pros
- •Low filing cost
- •Lasts for years (10+ in most states)
- •Prevents property sale without payment
- •Accrues interest over time
❌ Cons
- •No immediate payment
- •Only works if debtor owns property
- •May not trigger payment for years
- •Requires property sale/refinance
How to Choose the Right Option
Use this decision framework to select the collection method most likely to succeed in your situation.
Scenario 1: Cooperative Debtor + Verifiable Income
Debtor responds to contact, acknowledges debt, and has steady income or assets.
✅ Best Option: Negotiated settlement or payment plan
Lower cost, faster resolution, higher compliance. Start with settlement offer, fall back to payment plan if needed.
Scenario 2: Unresponsive Debtor + Known Employment
Debtor ignores contact but you know where they work.
⚠️ Best Option: Wage garnishment
Reliable ongoing payments without cooperation. File garnishment order with employer.
Scenario 3: Unresponsive Debtor + Known Bank Account
Debtor ignores contact but you have bank account information.
💼 Best Option: Bank levy
Fast lump-sum recovery. File levy order with bank. Can repeat if first attempt unsuccessful.
Scenario 4: Debtor Owns Property
Debtor owns real estate (house, land, commercial property).
🏠 Best Option: Judgment lien + other methods
File lien immediately (low cost, long-term protection). Combine with garnishment or levy for immediate recovery.
Scenario 5: Judgment-Proof Debtor
Debtor has no income, no assets, no bank accounts, no property.
❌ Best Option: Monitor and wait
Avoid enforcement costs. Monitor debtor's situation. Revisit collection when circumstances improve.
Cost-Benefit Analysis
Always calculate whether enforcement costs justify potential recovery. Here's a simple framework:
Quick Cost-Benefit Formula
Formula: (Judgment × Recovery Rate) - Enforcement Cost
Rule of Thumb: If enforcement costs exceed 20% of judgment amount, consider negotiation first. If judgment is under $1,000, DIY negotiation is usually most cost-effective.
Your Next Steps
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