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So in a situation where a person wins small claims court against a company, what are the steps in collecting judgement if the company doesn't want to pay? I've researched placing a lien or garnishing wages on the individual but can you do that against a company?
Jurisdiction: NV, US
First, you should simply write them a letter demanding payment of the judgment. You can keep sending them demand letters updating the interest on the judgment regularly (e.g. every month) and call them demanding to be paid on a regular basis so that your claim is annoying to them.
Second, you can use legal tools at your disposal. In the approximate order of the likelihood that you would resort to them and the ease of using them, these are:
You can record a judgment lien against any real property it owns, if any. This must be cleared when the property is sold and hurts the credit record of the company. You can also foreclosed on the lien although doing so involve quite a bit of legal technicalities and process and may require you to assume or pay off mortgages and liens higher in priority than your own. Basically, this involves getting the right kind of proof that the judgment was entered (in Colorado one gets a "transcript of judgment" from the clerk, but Nevada process may vary) and recording it in the real property records of the county where the real estate owned by the company is located.
You can garnish its bank accounts, if you know where the company banks, if not, you can learn this in the next step. This involves filling out a garnishment form (which may need a clerk of court's stamp) and then mailing it to the judgment-debtor and the bank (local practice might require a process server to deliver it).
You can issue interrogatories or take depositions of corporate officials to have them disclose what assets and sources of income it has (pursuant to Rule of Civil Procedure 69). This is somewhat of an involved process with legal rules and forms involved but if you don't know where the company has assets, you have few other choices but to do this and it gets their attention as well. You could also hire a private investigator to try to locate the company's assets.
You can obtain a writ of execution and attachment to have the sheriff seize tangible personal property belonging to the company. This involves multiple court form filings, fees, and coordination with the civil division of the sheriff's department that will often require you to post a liability bond, to hire people to carry away the property to a secure storage unit when it is seized for later auction, and for you to pay to publish notice of a sheriff's sale with a newspaper authorized to give legal notices. It may also require you to hire a locksmith and/or some to document the assets seized and to value them in real time during the seizure.
You can garnish accounts payable to the company from individuals and businesses who owe it money. The paperwork is similar to a bank account garnishment but it often doesn't go as smoothly and has to be more actively litigated since non-bank persons aren't as familiar with the process.
If you learn through Step 3 that the company has transferred assets to its owners or others while insolvent without receiving reasonably equivalent value in exchange, you can sue the recipient of the assets under the fraudulent transfers act in a separate lawsuit. This is almost impossible to do successfully without a lawyer.
In an extreme case (probably not justified by a small claims court judgment) you have force the judicial dissolution of the company and liquidation of its assets for failure to pay its debts in a separation lawsuit. This is almost impossible to do successfully without a lawyer.
In combination with other creditors of the company who are also unpaid, you can force the company into an involuntary bankruptcy. This is almost impossible to do successfully without a lawyer.
Wait for the company to go bankrupt (if this is likely) and file a claim in the bankruptcy. This involves filling out a one or two page form and filing it with the bankruptcy court.
In my experience in Colorado which has similar rules on this subject, companies with real estate usually pay upon demand (especially if they have a mortgage since an unsatisfied judgment is a condition of default on most business mortgages). But, if the company owns no real estate, commencing collections actions combination of 2, 3 and 4 is usually sufficient to get the company to simply pay the judgment without having to take the processes involved to completion.
This said, most of the options above involve fairly complicated paper work and procedural requirements. The average person who doesn't have a graduate degree or a business background would really struggle to do it right and there are sometimes significant fees involved.
Third, you can use other methods that don't involve the legal process that involve notifying people of their non-payment of a judgment.
One trick is to learn who it has major contracts like leases and large loans with, and advise them that there is an outstanding judgment against the company, which is often a condition of default under those contract that must be cured quickly.
Similarly, complaining about the company's non-payment of the judgment on customer review sites and social media can work sometimes.
Fourth, you can hire someone to do it for you. Often lawyers and collection agencies are more willing to collect a true money judgment from a court than they are to take on a claim that hasn't yet been reduced to judgment and will have to be litigated.
So, because it is so technically difficult to enforce your legal rights without a lawyer, even if you obtained the small claims court judgment without a lawyer, it may be worth the money to hire a lawyer to collect the judgment obtained, or to turn the judgment over to a collection agency (which also hurts the company's credit record) and to pay what that costs.
On a contingent fee basis, a 33%-50% contingent fee would be customary. Hourly legal fees can run from $150 to $450 per hour in Nevada for this kind of work and it would take at least several hours of work.
If the judgment is too small, it may not be cost effective to hire anyone to collect it on an hourly basis, and even collection agencies may decline to take on the case on a contingent fee basis because the work required would cost them more than the fee they would obtain if they won.
In the case of a small claims court judgment that isn't very large it is often not cost effective or worth your time and effort to pursue it actively.
