Collections 101 : What you need to know
By : Sarah MacGill Marr , Attorney
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Congratulations ! You have successfully navigated the small claims court process and have been able to secure a Judgment against that tenant who stopped paying the rent , the homeowner who called you to perform work in the dark of night after a terrible storm , or the patient who assured you that she would bring payment to her next visit . Although many business owners think the toughest part of the collection process is now behind them , most are surprised to learn that collecting the Judgment is a much more difficult and tedious task than expected . Because the collection process can be overwhelming , we are providing a general overview of the process of collecting a Judgment . As you begin to navigate the process of collecting a Judgment , keep in mind that Indiana Small Claims Rule 8 requires Indiana corporations to be represented by counsel in Small Claims Court if the amount in controversy exceeds $ 1,500 .
1Docket the Judgment . After securing the Judgment , register the Judgment in any county where the Defendant owns real property . If the Defendant is an individual , owns a home in Marion County , and a lake house in Brown County , Indiana , be sure to get a copy of the Judgment to both county Clerks for recording on the Foreign Judgment docket . This will protect your rights as a creditor in the event that the Defendant tries to sell either home .
2Prepare the Verified Petition for Proceedings Supplemental ( the “ Petition ”). Although the title of this document is complicated , the document itself is fairly straightforward — let the Court know that you are the owner of a Judgment , you do not believe the Defendant will make payments , and ask the Court to require the Defendant to appear to answer questions about any assets that exist .
3Garnishments to the Bank . If you know where the Defendant banks , be sure to tender draft
Garnishment Orders to the Court when you file the Petition . The Court may issue an ex parte Order that freezes the Defendant ’ s bank accounts and preserves your right to petition the Court to require the bank to release some or all of the funds to you until the Judgment is satisfied .
4Proceedings Supplemental Hearing . This is your chance to ask the Defendant questions about any assets that he has that could be used to satisfy the Judgment . The questions should include questions about any real estate , jewelry , boats , cars , or other assets owned by the Defendant .
5After the Hearing . Based on the information learned during the Proceedings Supplemental process , carefully consider whether any assets exist which could be used to satisfy any remaining balance on the Judgment , including a final order in garnishment which could require a bank to release some of the Defendant ’ s funds to you , or to an employer to garnish a certain amount of the Defendant ’ s wages . Based on the information learned during the Proceedings Supplemental hearing , you may also pursue a process with the local Sheriff Department to seize any personal or real property owned by the Defendant so that it can be sold to pay the balance of the Judgment . These procedures vary from county to county , so be sure to check with the local Sheriff about the process .
For assistance with your questions about the collections process or collecting amounts due to you , please contact Sarah MacGill Marr , Riley Bennett Egloff , LLP .
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