If you sue and win a reluctant payer, will you ever see any money?
August 6, 2010 10:02 AM Subscribe
LawFilter: Recently in my city, a teacher was awarded thousands in a defamation lawsuit. I am wondering, in cases like this, where someone is justifiably awarded damages - What are their chances of getting the money?
You are not a lawyer, but I am hoping someone who is conversant with the law can answer this for me. Isn't it the case that if someone refuses to pay, there's nothing that can be done? What can be done? I have also heard that courts will say that they are not collection agencies. What is the truth here? Is it the case that if you sue and win that if the person refuses to pay, that you'll never see any cash?
You are not a lawyer, but I am hoping someone who is conversant with the law can answer this for me. Isn't it the case that if someone refuses to pay, there's nothing that can be done? What can be done? I have also heard that courts will say that they are not collection agencies. What is the truth here? Is it the case that if you sue and win that if the person refuses to pay, that you'll never see any cash?
Isn't it the case that if someone refuses to pay, there's nothing that can be done? ... Is it the case that if you sue and win that if the person refuses to pay, that you'll never see any cash?
If your description were accurate, then no one would ever bring a lawsuit because a losing defendant would be free not to pay, and any defendant would choose that option if it were legally available. Clearly, there are lawsuits, and defendants are not free to decide not to pay if they don't feel like paying.
If the defendant can't pay because they don't have the money, then you can't get money from them. ("You can't get blood from a stone.") But if they just don't want to pay (which would include more or less every defendant in the history of the planet), there are various legal mechanisms to get their money. I don't know anything about the details of how that works, so I'm sorry that I'm not, as you requested, "conversant with the law." But there are some pretty common procedures that any lawyers will have learned about in law school and studying for the bar exam. If you want to actually make any of these things happen, you'd need to contact a lawyer rather than AskMe.
posted by Jaltcoh at 10:18 AM on August 6, 2010
If your description were accurate, then no one would ever bring a lawsuit because a losing defendant would be free not to pay, and any defendant would choose that option if it were legally available. Clearly, there are lawsuits, and defendants are not free to decide not to pay if they don't feel like paying.
If the defendant can't pay because they don't have the money, then you can't get money from them. ("You can't get blood from a stone.") But if they just don't want to pay (which would include more or less every defendant in the history of the planet), there are various legal mechanisms to get their money. I don't know anything about the details of how that works, so I'm sorry that I'm not, as you requested, "conversant with the law." But there are some pretty common procedures that any lawyers will have learned about in law school and studying for the bar exam. If you want to actually make any of these things happen, you'd need to contact a lawyer rather than AskMe.
posted by Jaltcoh at 10:18 AM on August 6, 2010
Best answer: Courts have the inherent ability to enforce their decisions. A person who refuses to appear in court when summoned will have a warrant issued for their arrest. A person who refuses to pay damages a court has awarded can, among other things, be sent to jail for contempt, have their assets seized, their paycheck garnished, and their property encumbered by lien. Which one of these happens is determined by some combination of what the plaintiff wants and what the judge considers to be appropriate. This is one area where judges have a lot of discretion.
All of this, as Jaltcoh suggests, are contingent upon their ability to pay. An impecunious defendant who has their wits about them will simply file for bankruptcy as soon as a judgment is awarded, which gives plaintiffs some incentive to either 1) not bring the suit in the first place, or 2) settle for an amount within the defendant's reach. But provided the defendant has anything of value, the court can get at it.
Note that getting thrown in jail for refusing to pay your debts is not the same thing as debtor's prison, which was the now-antiquated practice of throwing those who could not pay into jail until such time as they could. How exactly they were supposed to come up with the money was one of the unanswered questions which lead to the eventual abandonment of the practice. No, refusing to pay a debt which you are capable of paying is contempt of court, and judges can totally toss your ass in jail for thumbing your nose at them.
posted by valkyryn at 10:29 AM on August 6, 2010 [3 favorites]
All of this, as Jaltcoh suggests, are contingent upon their ability to pay. An impecunious defendant who has their wits about them will simply file for bankruptcy as soon as a judgment is awarded, which gives plaintiffs some incentive to either 1) not bring the suit in the first place, or 2) settle for an amount within the defendant's reach. But provided the defendant has anything of value, the court can get at it.
Note that getting thrown in jail for refusing to pay your debts is not the same thing as debtor's prison, which was the now-antiquated practice of throwing those who could not pay into jail until such time as they could. How exactly they were supposed to come up with the money was one of the unanswered questions which lead to the eventual abandonment of the practice. No, refusing to pay a debt which you are capable of paying is contempt of court, and judges can totally toss your ass in jail for thumbing your nose at them.
posted by valkyryn at 10:29 AM on August 6, 2010 [3 favorites]
In Canada, a judgement is issued stating that the guilty party must pay X to the plaintiff. If the guilty party refuses to pay then the plaintiff can use the judgement to hire a collection agency which will be able to use any means, including freezing assets, to obtain the money. Any fees incured by the collection agency are also covered in the judgement so you do not need to pay them anything directly.
posted by Vindaloo at 10:39 AM on August 6, 2010
posted by Vindaloo at 10:39 AM on August 6, 2010
There are in fact collection agencies who will buy your judgment outright for a lump sum, perhaps a dime on the dollar, then try to get anything they can from the defendant, which they then keep. If the award is particularly large (say it includes substantial punitive damages, which you do not really care about, since they far exceed what is necessary to make you whole) or if having a fraction of the judgment right now is more useful to you than getting all of it in several years, this is a route you can take.
posted by kindall at 11:18 AM on August 6, 2010
posted by kindall at 11:18 AM on August 6, 2010
Note that if they have a house in a jurisdiction (e.g. Florida, Texas) with a homestead exemption that covers it, they can't be forced to sell their home to pay creditors.
posted by one more dead town's last parade at 11:21 AM on August 6, 2010
posted by one more dead town's last parade at 11:21 AM on August 6, 2010
Note that if they have a house in a jurisdiction (e.g. Florida, Texas) with a homestead exemption that covers it, they can't be forced to sell their home to pay creditors.
Note that in many jurisdictions the homestead exemption is laughably small (Florida and Texas are unusual cases). In many cases, it's only a few thousand dollars. If you've got a house that's of that little value, you're probably effectively judgment proof anyway.
posted by jedicus at 11:49 AM on August 6, 2010
Note that in many jurisdictions the homestead exemption is laughably small (Florida and Texas are unusual cases). In many cases, it's only a few thousand dollars. If you've got a house that's of that little value, you're probably effectively judgment proof anyway.
posted by jedicus at 11:49 AM on August 6, 2010
The steps, after a judgment has been entered, assuming no appeal, and assuming no insurance to pay, could include:
1. A creditor's examination to find out what assets the defendant has and where they are located.
2. Garnishment of wages (subject to limits), attachment of accounts, and as a last resort, execution on the judgment by seizure and physical sale of assets.
3. A bankruptcy filing by the defendant, which will stop collection efforts in their tracks and put the judgment creditor in line with every other non-secured creditor to whom money is owed.
posted by yclipse at 1:21 PM on August 6, 2010
1. A creditor's examination to find out what assets the defendant has and where they are located.
2. Garnishment of wages (subject to limits), attachment of accounts, and as a last resort, execution on the judgment by seizure and physical sale of assets.
3. A bankruptcy filing by the defendant, which will stop collection efforts in their tracks and put the judgment creditor in line with every other non-secured creditor to whom money is owed.
posted by yclipse at 1:21 PM on August 6, 2010
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posted by Dee Xtrovert at 10:15 AM on August 6, 2010