While I have written many posts about the firm’s post-judgment collection practice, were you aware that Andre Law Firm P.A. does account receivable and pre-judgment collection as well? I am often retained by small business owners (and even other law firms) to collect on their delinquent accounts. This is among the most rewarding work I do. As a small business owner myself, I feel a lot of kinship with fellow small business owners, so helping them collect what they are owed for their hard work is especially fulfilling.
Attorneys’ Fees Provisions
One potential pitfall I constantly warn my small business clients about is the importance of having an attorneys’ fee provision in their contracts/invoices/terms and conditions. I have had clients justify excluding these provisions for fear of sounding too “litigious.” The bottom line is that if your delinquent account is fairly low (under $5k for instance), attempting to litigate to recover that amount without an attorneys’ fee provision is usually not cost effective. That means you will likely spend your valuable time trying to figure out how to collect in small claims court on a pro se basis.
I have a new client that tried navigating small claims court themselves on several of these types of cases only to be stymied by relatively basic rules of procedure and the machinations of the litigation process. While one of these delinquent accounts you might consider writing off, having a few of them really adds up against your bottom line. With an attorneys’ fee provision (and assuming the debtor is collectable), you can have a lawyer litigate the matter for you, and you can concentrate on serving paying clients and generating new business.
Do you have delinquent accounts you need to collect on? Andre Law Firm helps small businesses recover these accounts, in an efficient and cost-effective manner. Contact us today to discuss your AR needs.
We’ve had such an overwhelming response to our recent journal posts that we decided to a short FAQ, regarding questions people/colleagues have had regarding collection law and our practice. The FAQ’s will be answered by Andre Law Firm P.A. founder and managing shareholder Tony Andre.
Q: What is the hardest collection you ever did?
A: We are currently in it now. It involves a Debtor who was in the national news cycle in 2019 involving the then president of the United States (the debtor is NOT the former president). We had been trying to collect against the Debtor in that case for some time before the 2019 controversy and the case is still not wholly resolved and still has a way to go. It’s been a grueling ordeal, but the funnest case I’ve ever had also.
Q: What is the best part of Collections law
A: Achieving a tangible result for the client. The system can be so messed up when your client through no fault of their own loses money to a debtor who refuses to pay (and often can) after a litigation produces a judgment. Getting a result for the client makes the practice rewarding, because I know how frustrating the whole process was for them.
Q: What is the most frustrating part of collection law?
A: Florida is a debtor-friendly state! You always have to view collections from that lens. The laws favor the debtor generally so you usually have to go into court well briefed and laser focused because there are many avenues for the debtor to get out of paying. That being said, it is incumbent to be aggressive for your clients and put the Debtor on notice that they have a fight ahead of them, and they ought to work it out.
Q: Does Andre Law Firm have any other practice areas?
A: Yes! Our firm is a general commercial litigation and business law practice first and foremost. Tony Andre, Esq. learned under great legal minds in the area of creditor’s rights and commercial law. He also practices creditor’s rights, commercial landlord tenant law, business law litigation, employment, and general civil matters.
Q: When you get a new collections case do you serve a demand letter?
A: Post judgment? No, as a general matter. We almost always let our actions do the talking, that being said there’s a time and a place for everything. This practice takes a lot of creativity, so you never rule anything out. We like to usually “take a shot across the bow” in the form of some sort of targeted collection effort for maximum effect.
Q: Can you depose an individual debtor’s family members in aid of executing a judgment?
A: If it’s relevant.
Q: What do you think is the most important part of post judgment collection work?
A: Information (mostly in the form of discovery!). We speak to this in a prior post.
Q: How long has Tony Andre practiced law?
A: I have been a member of the Florida bar since September 2007 and have worked continuously since then. I am also admitted to New York (2010) but do not practice in that jurisdiction very much.
Q: Have you ever collected a judgment in another country?
A: A few times! Most notably we domesticated and enforced a judgment from Florida in Egypt and was able to collect on it. It was a really interesting process! Time consuming for sure.
Q: What’s the weirdest thing you ever levied?
A: The Unites States Patent for an anti-snore pillow. I will undoubtedly write about this in a future blog post, it was a really fun collection.
Q: Do you do debtor’s work?
A: Not really, too many conflicts, but we are always willing to talk about a case.
In an earlier post we discussed the process for levying a vehicle. In this post we will discuss the process for the levy of real property.
Threshold Issues
A couple of issues that must be addressed in any levy involves 1) is the property worth it and 2) is my judgment lien perfected? We have discussed the perfection issue in this past post, and for the purposes of this post we will assume that the lien was properly perfected. In a recent post, we also discussed some threshold issues as to determining whether an asset was worth levying and questions which need to be answered to make that determination. Principally, whether the Debtor owned the asset outright or whether the asset subject to certain interests (exemptions or liens). The analysis for real property levies is similar.
Is there a Mortgage? Is the Property Homestead?
I think the single most determinative issue on whether property is worth levying is whether it is subject to a mortgage. Often times debtors who fail to pay one creditor, often fail to pay numerous creditors. If you have a mortgage in default from the purchase money lender, your judgment lien will eventually be extinguished in a subsequent foreclosure. If the mortgage is in place and you levy that property Creditor takes that property subject to that mortgagee’s interest. It is not ideal. I’ve had investor clients do this with the purpose of renting the levied property to make money in the short term, but that strategy is not for everyone.
The easiest way to determine whether there is a mortgage is to order a title search or ownership and encumbrance report. There are many great companies that provide this service for cheap (less than $100) and quickly. In the best-case scenario, Debtor will own the property free and clear (or subject to minor junior liens). Taking subject to a mortgage can also be worth it, if the debtor has a lot of equity in the target property sought to be levied.
It should be noted our firm deals primarily with commercial collection matters, and for the purposes of this example we are assuming that the property sought to be levied is not subject to Florida’s very strong homestead exemption. Article X, Section 4 of the Florida Constitution. Obviously if the property is the Debtor’s homestead, a normal judgment lien would not be effective in levying this type of property.
Look to your Sheriff (again)
As we discussed in our prior post about levying vehicles, the process for levying real property is largely uniform but is subject to certain individual requirements of the local sheriff offices which may be conducting the levy. The Basic process is as follows.
1) Perfect of your judgment lien
2) Delivery of Documents to Sheriff. The documents that every sheriff will need for a levy are an original Writ of Execution from the Clerk of Court; Certified copy of the final Judgment; Certified copy of vesting deed; An an Affidavit of outstanding liens, and Levy Instructions for the Sheriff. Some sheriffs will also require title search (such as Broward County).
4) Publication of Levy by Sheriff.
5) Sale of property by the Sheriff.
Conclusion
Unlike car levies, the costs/deposits tend to be much more uniform in nature from county to county. I prefer real properties when available because the market for these sales tends to be more competitive and more sophisticated. This was probably due to the foreclosure crises from years ago. We have used real property levies to great effect in our practice. If the property is owned outright, it will often cover the cost of the judgment, or force the Debtor into immediate settlement unencumbered real property in Florida is a most valuable asset. If you have questions about real property levies contact Andre Law today.
In our practice, we find garnishing bank accounts to be the single most efficient way to collect on a judgment. While rarely does the amount garnished fully satisfy a judgment (though it happens from time to time), the garnishment’s ability to get the judgment debtor’s attention is indeed where its power lies.
What is a Garnishment?
A garnishment is slightly different from a levy. A garnishment is a collection tool which attaches to the contractual relationship between the judgment debtor and a third party. The relationships that are most often subject to garnishment are that of bank account holder (Debtor) and the bank, and the relationship between employer and employee (Debtor) for salary and wages. Basically, people or entities which owe money to the Debtor can be served with a writ of garnishment, and that money can bypass the debtor to be paid to the creditor directly (with the help of the Court and subject to certain exemptions from the debtor).
Garnishments are governed by Chapter 77 of the Florida Statutes. The Garnishment statute while straight forward, requires strict construction, and attention to detail, as there are many procedural pitfalls that may cause the garnishment to fail.
The basic process for a garnishment is as follows: The Creditor files a motion and has the clerk issue the writ for a small fee (in the case a continuing writ against salary and wages a judge will issue). The Creditor then serves the writ on the Garnishee. Soon thereafter, Creditor must serve a notice of service or notice of garnishment on the Judgment Debtor of the Writ of Garnishment (very important this is done in accordance with the statute or the garnishment will fail); The Debtor than has 20 days from service of the notice to respond and assert any exemption from garnishment. An exemption is a statutory excuse for why the debtor should not be garnished. If an exemption is raised and served by the Debtor, Creditor then has 14 days (or 8 days if the exemption was hand delivered to creditor’s lawyer) to respond to the exemption (by verified motion) or the writ is automatically dissolved by the clerk without any hearing (so beware). In addition, the Garnishee has 20 days from service of the writ to answer. When the Garnishee answers, Creditor must then serve another notice to the debtor attaching a copy of the Garnishee’s answer. Debtor then has 20 days to respond as to whether answer is correct/the garnishment is true. These deadlines overlap and addressing each deadline/response requires a skilled collection lawyer to navigate.
Locating Assets Subject to Garnishment
The beauty of garnishment is that its a streamlined way to enforce a judgment. However, if you do not know where the debtor banks, or where the debtor works (in the case of an individual), a garnishment is useless. In a prior post, we discussed the importance of post-judgment discovery and why it is vital to collecting a judgment. A skilled collection firm like Andre Law can not only help you find such assets, but it also can use tools like garnishment to help collect that judgment. Contact Andre Law today to discuss any questions you have about garnishment or collections.
As we have discussed on our firm’s website, most judgments go unpaid. Courts do not collect or force judgment debtors to pay judgments outright. Often obtaining the judgment against the debtor is just the first step, and usually the Debtor has to be legally coerced into paying anything.
Many debtors, while litigation is ongoing, attempt to judgment proof themselves. This becomes inevitable, when the debtor knows they will not prevail in the underlying suit, and a big verdict or judgment is looming. Often with the threat of judgment, debtors fraudulently convey assets to third parties, in an attempt to conceal those assets from creditors.
Luckily, there are procedures for attacking (and unwinding) these fraudulent conveyances, so that the transferred asset can be attached or levied for satisfaction of the underlying judgment. We will briefly discuss here, Florida’s laws on fraudulent transfers.
Fraudulent Transfer Defined
Under Florida’s version of Uniform Fraudulent Transfers Act (“FUFTA”), a fraudulent transfer is generally defined as “a transfer made or obligation incurred by a debtor if made with actual intent to hinder, delay or defraud any creditor of the debtor” or a transfer made “without receiving a reasonably equivalent value in exchange for the transfer or obligation.” Fla. Stat. § 726.105(1)(a)(b). The purpose of the act is to bring back fraudulently transferred assets back to the judgment debtor (and thus reachable by the creditor) or to render a money judgment against the transferee.
Actual and Constructive Fraud under FUFTA
There are basically two broad types of fraudulent transfers under FUFTA. Those types are “actual” and “constructive.” An “actual” fraudulent transfer, in one which focuses on the transferor’s intent to delay, defraud or hinder creditors (Fla. Stat. § 726.105(a)). This is differentiated from “constructive” fraudulent transfer, which focuses—not on the transferor’s intent—but some of the circumstances surrounding the transaction (Fla. Stat. §§ 726.105(1)(b); 726.106(1) and 726.106(2)). Of course, proving actual intent of a debtor can be difficult, so FUFTA provides a list factors—or “badges of fraud”—which a Court can use to infer the debtor’s intent (For example, transfer of the asset to a close family member or “insider” as defined by the act). See Fla. Stat. § 726.105(2). Proving a constructive fraudulent transfer, on the other hand, requires proof that the debtor (i) did not receive reasonably equivalent value for the asset; and (ii) the transfer rendered the debtor insolvent. Fla. Stat. §§ 726.105(1)(b); 726.106(1) and 726.106(2).
Remedies under FUFTA
FUFTA sets forth six basic remedies available to creditors: (1) avoidance of the transfer; (2) attachment of the asset; (3) injunctive relief to prohibit further transfers; (4) appointment of a receiver; (5) levy and execution; and (6) “any other relief the circumstances require” Fla. Stat. § 726.108(1)–(2).
Usually, a creditor will seek the remedy of avoidance of the transfer or a money judgment against the transferee of the asset. “[FUFTA] is either an action by a creditor against a transfer directed against a particular transaction, which, if declared fraudulent, is set aside thus leaving the creditor free to pursue the asset, or it is an action against a transferee who has received an asset by means of a fraudulent conveyance and should be required to either return the asset or pay for the asset (by way of a judgment and execution).” Yusem v. South Florida Water Mgmt. Dist., 770 So. 2d 746, 749 (Fla. 4th DCA 2000).
If the creditor does not seek to unwind the transaction, alternatively the creditor can look to obtain a money judgment against the transferee. The money judgment will be in the amount of the value of the asset transferred, at the time of the transfer, or the amount necessary to satisfy the creditor’s claim, whichever is less. Fla. Stat. § 726.109(2).
Closing
FUFTA provides a powerful tool in the judgment creditor’s arsenal to go after debtors who attempt to judgment proof themselves, prior to judgment being entered. We discussed in a past journal, how FUFTA and Fla. Stat. 56.29 are often used in tandem to attack fraudulent transfers. If you have any questions on how Andre Law Firm P.A. can assist you regarding fraudulent transfers contact us today.
We are regularly retained by out-of-state creditors to go after local debtors. We often domesticate foreign judgments for our clients here in Florida. Often, those creditors already have an idea on what they want to do from a collection standpoint. Perhaps these creditors might have analysts or have already used a private investigator to research the Debtor before they come to us. Often creditors may have identified assets they seek to levy before they contact us
Look More Closely at the Asset
The Creditor might say “I can see the Debtor owns a 2020 Mercedes AMG GT Coupe (MSRP $116,000); can I take that?” My answer, which is often maddening to my clients, is often “it depends.” “What do you mean? I want that car!”
Locating certain assets which may be subject to execution is a relatively straight-forward process (assuming there hasn’t been fraudulent transfers that is). Things like cars require title registrations that come up easily in public records searches. The questions that are rarely considered after a client locates such an asset are: 1) is the asset owned outright by Debtor (or is it being leased or financed); 2) Is that asset owned individually owned or subject to an exemption or claim of another; and 3) are the costs associated with levying this asset worth what the asset will get you at a levy sale.
One thing that many are not readily clear about. A levy is when the county sheriff seizes an asset and sells it an auction. The sale proceeds are then used towards satisfying the judgment. I know many know this, but you’d be surprised how some folks think it means you get the asset handed to you. While judgment creditors are usually entitled to a credit bid up to the amount of their judgment, it’s important to know this. Assuming you have perfected your judgment lien as we discussed here, other considerations must be made before the levy is effectuated.
Levy Considerations
In your 2020 Mercedes example, if your car is leased, you cannot take it because title belongs to the lessor (though if the lease is pre-paid there might be an argument that the pre-paid lease is an asset, but this hyper technicality will not be discussed here). What if our debtor owns the vehicle jointly with her spouse or domestic partner? Again, you may not be able to levy the asset if it is subject to an exemption like tenancy by the entireties. Is the car subject to financing? If so you would take subject to the car note. Finally, would the asset be worth it even if these hurdles are not present?
The Auction
In our 2021 Mercedes example, if the debtor owns the car outright (high roller) it most likely worth it. If you levy the car, the car will then be in auctioned. Then, if the auction is competitive, you may be able to collect a good amount. It is important to note: often auctions are not well publicized, and bidding can be outright pathetic.
If you have specialized assets like art or collectibles, you might need to market the auction so bidding can be competitive. Otherwise, at the sale you will have a bunch of bargain shoppers, looking for a deal. In this instance, you might want to reach out to car dealers in the area and notify them of the levy sale in an attempt to raise competitive bidding. Of course, check with Florida Bar to determine what information you can provide and in which manner you can provide it.
We had one levy where we levied the contents of a storage unit and someone purchased boxes/personal effects and asked me for the contact information of the debtor so he could sell the guy’s family photos back to him…. I of course did not cooperate, but man it’s a dog-eat-dog world out there friends.
It’s my hope this article was able to illustrate some of the numerous issues tangential to a levy. Contact our firm today to discuss any post judgment collection questions you have.
I would like to pose this premise to you. You have worked hard and spent money to obtain a final judgment, but the judgment debtor will not voluntarily pay. How do you collect? Perhaps this is the wrong question to ask. The fundamental question should be “Can you collect?”
Obviously, if you are the meritorious party in a lawsuit against a company like AT&T or Suntrust, you can rest assured, you will likely be paid. The issue of non-payment most often comes against lawsuits against closely-held companies, individuals, or family-owned operations.
Often to even obtain a modest judgment (let’s say $50k), it can take five figures worth of money spent on attorneys’ fees (and court costs) to obtain that modest result. Combine that with the fact judgment creditors can get so emotionally invested in the outcome of a litigation they often get irrational regarding their own case’s potential for collection.
Research the Debtor
In order to determine whether a judgment can be collected, it takes a global view of the judgment debtor and its finances. While no mathematic formula exists in determining whether a judgment is collectable you should start with some threshold questions:
Has the law firm that obtained the judgment perfected your judgment lien?
Did your judgment require the judgment debtor to serve a fact information sheet?
If the Judgment Debtor is a business entity, is that entity still operating?
What type of assets does the Judgment Debtor own (e.g. real property, vehicles, assets of the variety that would show up on an asset search (like certain equipment)).
Has the judgment debtor made any transfers of assets lately?
These considerations may seem obvious, but I can’t even tell you how often people come to me to collect judgments that are obviously uncollectable. Often people do not want to hear that the judgment is not collectable (even when you provide evidence on why it is not collectable). Perhaps they do not care the judgment is uncollectable and they just want someone working on it for a contingent fee hoping for a miracle.
The general fiscal health of the judgment debtor (and if an entity, the principals comprising the management of the judgment debtor) helps paint a picture of collectability. There are many tools you can utilize to help paint that picture, such as asset searches, public records searches (like UCC Lien searches, or searches of the official public records), and simple internet searches. Sometimes it is even advisable to hire a private investigator to research your debtor’s finances.
Lien Perfection and Passive Collection
Keep in mind that a judgment that is not collectable now might not always be uncollectable. That’s why judgment lien perfection is so important. “Has the lawyer that obtained the judgment perfected your judgment lien?” In a previous journal entry, we discuss the process and importance of perfecting your judgment lien as soon as possible. Preserving the priority of your lien may allow you to collect passively (e.g. judgment debtor trying to sell or refinance real property has to address your judgment lien).
Moreover, you might even find 2 or 3 years down the road, the judgment debtor has gotten back on their feet and you can now actively collect your judgment. If the judgment is currently uncollectable, it is advisable to keep an eye on the judgment debtor from time to time. Often judgment debtors (particularly individuals) are very entrepreneurial and will move on to the next hopefully profitable venture.
Not having a realistic assessment or expectation of the collectability of a judgment is often a recipe for disaster. Contact Andre Law today to figure out if your money judgment is one which you can collect against.
Post-judgment collection, like most litigation, is more art that science. Often, successfully collecting on a non-paying judgment debtor is made possible by the proper pressure point being leveraged into a positive result for your client. Most of time, a collection is not made because you found some hidden asset or bank account to levy or garnish.
More often than not it is information you discover, that leads to your collection. In the bulk of our collections practice, we deal with closely-held concerns who can nimbly hide or conceal assets. Treating these debtors like they are Fortune 500 company is an exercise in futility. Judgment Debtors consisting of closely-held entities or individuals are some of the hardest to collect against. They routinely ignore post-judgment discovery requests and subpoenas with little fear or respect of court sanction.
Third-Party Discovery
The key to finding valuable information starts with obtaining as much third-party discovery as possible to paint a picture of your debtor’s financial condition. In our experience, we have found even the most “scrupulous” of people, when faced for a debtor’s exam or deposition in aid of execution (or any post-judgment discovery), will gladly lie to the examining lawyer’s face or flatly perjure themselves in their interrogatory responses or fact information sheet.
It is incumbent upon the judgment creditor’s attorney to get as much information from third parties who have no incentive to lie about the financial information requested. Obviously, if you are aware of where the judgment debtor has banking relationships, banks are a perfect place to start, but a lot of useful financial information can be held by customers, utility companies, title agents, etc. The list of possible valuable information is quite simply endless. Only when you have a lot of verifiable third-party information is a good deposition in aid of execution of the judgment debtor recommended, and most often it is still more often used as a tool of coercion (they are typically not pleasant, so debtor’s seek to avoid them especially if they plan on perjuring themselves anyway). So, in this respect the collection attorney turns into part private investigator to find useful information and piece it together. In the best cases this may lead to an asset or a pressure point.
Use of Third-Party Discovery
For example, recently our firm was hired by another law firm to collect a modest judgment against an auto body shop. We were able to quickly satisfy a portion of our judgment via quick garnishment, but the trail went cold thereafter. Our firm then sprang into action and researched the debtor closely and found a real estate transaction where the judgment debtor was seller. A subpoena was served on the purchaser for documents regarding the sale (how the purchaser purchased the property and the like). When we were speaking to the subpoenaed deponent about the document production, the deponent mentioned that the judgment debtor moved its business across the street and renamed it. A quick search with the Florida Department of State Division of Corporations found that the judgment debtor had started a whole new business incorporated by its principal’s wife across the street, giving rise to a successor liability claim (successor liability to be discussed in future blog). We then approached judgment debtor’s counsel with this information and a signed and finalized motion to commence proceeding supplementary (which impleaded the wife and the successor entity, which we threatened to file) a full settlement was reached shortly thereafter.
It was not the court or sheriff that led to this settlement. Not a garnishment or levy. It was confronting the judgment debtor with its actions and the threat of putting other creditors on notice of the judgment debtor’s essentially fraudulent transfer in the form of successor liability that led to the positive result for our client.
Andre Law Firm P.A. is well-versed on creative and sophisticated methods of debt collection that assists our clients (and other law firms) in collecting against judgment debtors. Please contact us today, to see how we may be of service.
If winning a lawsuit guaranteed recovery to the prevailing party, there would not be law firms such as Andre Law specializing in post-judgment collection. Often the entry of a judgment or a verdict is just the first step in complete recovery. Take the following and all too common example: Plaintiff seeks to recover, after a lengthy lawsuit and trial, from a Defendant who borrowed a large sum of money from Plaintiff and never paid it back. A judgment is awarded in favor of Plaintiff for $500,000.00. Defendant, in order to protect his assets from garnishment and levy, creates shell limited liability companies in order to hold bank accounts which are solely for personal use and to otherwise hide non-exempt assets subject to execution. How does Plaintiff recover? A simple of writ of garnishment in the name of Defendant would not freeze the assets held in the name of the shell companies, nor would a sheriff levy on tangible property titled in the name of a shell company.
Fla. Stat. 56.29 Proceedings Supplementary
The answer is found in Fla. stat. 56.29 which governs supplemental proceedings to execution in Florida. This statute is a powerful tool which grants the Court equitable powers to make the judgment creditor whole. The Court has the power to examine the judgment debtor and third parties regarding any possible property which may be subject to execution by the judgment creditor.
Supplemental proceedings provide a “useful, efficacious, and salutary remedy at law enabling the judgment creditor not only to discover assets which may be subject to his judgment, but to subject them thereto by a speedy and direct proceeding in the same court in which the judgment was recovered.” Regent Bank v. Woodcox, 636 So. 2d 885, 886 (Fla. 4th DCA 1994) (citation omitted).
Threshold Requirements
The requirements in opening a supplemental proceeding are minimal. There should be an unsatisfied Florida judgment and/or lien for this tool to be available. Also, upon filing of the motion for supplemental proceedings, the Judgment Creditor should have a valid and outstanding writ of execution issued, and an affidavit from the judgment creditor accompanying the motion for relief. To initiate the supplemental proceedings, the judgment creditor must file a motion and an affidavit in the court that the original action arose. The motion must (1) describe the judgment debtor’s nonexempt property or obligation to be used to satisfy the judgment; and (2) identify the third party in possession of the nonexempt property or who owes the obligation. Additionally, the affidavit must provide general information about the case, the parties, and the outstanding judgment, such as a statement that the execution on the judgment is “valid and outstanding.” After the motion and affidavit have been filed, the judgment creditor is entitled to proceedings supplementary as a matter of law.
Equitable Remedies
As previously mentioned, Fla. Stat. 56.29 is equitable, which means courts have the discretion to come up with an equitable remedy that affords a judgment creditor complete relief. See Donan v. Dolce Vita Sa, Inc., 992 So. 2d 859, 861 (Fla. 4th DCA 2008). A court can even enter a money judgment against any third parties who may hold the property subject to execution. Fla. Stat. §§ 56.29(6), 56.19 (2016); and if a third-party transferee retains the property solely for purposes of delaying satisfaction of the judgment, the court may award an additional 20 percent of the value of the property in damages. Fla. Stat. § 56.18 (2016).
Going back to our hypothetical posed above: A supplemental proceeding in this instance, assuming that the debtor had no plausible defenses (they hardly ever do), a money judgment could be entered against the shell companies, the Court could order the turnover of the property held by companies, and order any other such proper relief. Obviously, the Court would have to fashion a remedy powerful and flexible enough to deter the debtor from further devising assets to defraud creditors. The beauty of Fla. Stat. 56.29 is that it does allow for this creativity, by the court and the creditor.
Conclusion
Andre Law Firm has used this tool time and again to help its clients recover assets and coerce payment of judgments by judgment debtors. While Florida is generally a debtor friendly state, Fla. Stat. 56.29 is one the most powerful tools available at the creditor’s disposal. If you have any questions regarding this tool, contact us today.
You have been involved in a long and contentious litigation and your lawyers obtained a money judgment in your favor. What happens next? The Debtor has to pay right? If it were only that easy! Collecting on a judgment is often a cat and mouse game.
The honest truth is that many judgments are not paid voluntarily. You have to enforce your creditor’s rights. Many firms are not equipped to handle cases once it gets to post judgment, and often neglect the first step in enforcing a judgment. Perfecting a judgment lien is the first step toward collecting on the judgment.
We get many cases that involve judgments obtained by other law firms that did not bother to perfect the client’s judgment lien interest. If you have a judgment entered in your favor and you need to collect, contact Andre Law to determine how you can get your rights enforced, and to make sure your judgment lien is perfected.
What is “perfecting” a judgment lien? Essentially this is the process you take to make sure your judgment acts as a lien on the debtor’s assets. Perfecting the lien preserves your priority in regard to competing creditors. It requires a few easy steps, but often firms do not even bother to do this for their clients. Collecting on a judgment is a complicated process and not observing technical rules could be disastrous.
Judgment Liens on Real Property
In Florida, you essentially have two different forms of judgment liens. One is for real property and one is for personal property. First we will address the real property judgment lien. When your judgment is entered, you must obtain a certified copy of that judgment. You then record judgment in whatever county your judgment debtor owns real property. (An experienced collection firm like Andre Law can locate real property assets). Only a recorded certified judgment will act as a lien on all of the debtor’s property in that county. Further, the lien is perfected as of the date of recording. This means it will take priority over most liens recorded after (there are a few exceptions). You must perfect your judgment lien in this fashion if you seek to levy specific non-exempt real property belonging to the debtor.
Judgment Liens on Personal Property
When it comes to personal property (which is non real estate property), perfecting your judgment lien requires applying for a judgment lien certificate with the Florida Department of State Division of Corporations. For a small fee, a judgment creditor can register for a judgment lien certificate which lasts for five years (which can be extended prior to expiration). This registration acts as a lien on the debtor’s personal property in the state. When your personal property lien is perfected you are able to levy personal property under the Florida Statutes with a county sheriff or federal marshal. This can be especially useful in instances where the debtor has valuable property like vehicles or vessels you seek to levy.
Do Not Delay!
It is crucial that your lien is perfected by your attorney when the judgment is entered. Even if your attorney will not do the post-judgment collection work for you, this is essential. Protect your rights or a competing creditor can step ahead in lien priority despite obtaining his judgment later.
Do you need a Debt Collection Attorney in Miami or the rest of Florida? Contact Tony Andre of Andre Law Firm P.A. today.
