If you are owed money, the most effective way to collect upon the debt is to file a lawsuit against the person who owes you money. In Louisiana, you have three years to sue to collect the debt on an open account and five years for promissory note debts. However, Louisiana law generally requires an “amicable demand” to be issued prior to the commencement of a suit. An overview of the major FDCPA and the LFDCS requirements state that you must send written correspondence to the debtor’s home address within five days of the first communication identifying who the debt collector is, who they are collecting on behalf of, and the balance owed. In addition, the correspondence must advise the consumer that they have the right to dispute the debt, and have 30 days to demand that the debt collector validate the debt.
Once you have completed the amicable demand steps, filed your lawsuit, and received a judgment in your favor, you will still have to collect the debt from the opposing party. Hopefully the defendant will voluntarily do what the judgment orders him to do. But the person who owes the money (the judgment debtor) doesn’t always pay as required by the judgment. The party that is owed must then proceed through the judgment collection process in Louisiana.
A money judgment issued by the Court of the State of Louisiana may only be enforced for a period of 10 years, so there’s no time to waste. (C.C. 3547). After the clerk enters the judgment, the first thing you should do is talk to the judgment debtor. Ask the judgment debtor if she can pay you immediately, or try to arrange a payment schedule right away. If they cannot pay, or simply fail to pay the judgment, you have a few judgment collection options in Louisiana.
Writ of Execution
Also known as “executing judgment,” this is when you take (or “levy”) some of the defendant-debtor’s property or assets to pay what he or she owes. Generally, only certain personal items can be levied, such as money in bank accounts, and personal property like jewelry, art, or motor vehicles, etc.
Louisiana is unique in that it protects other personal property from judgment collection, including certain property necessary to exercise a trade, calling or profession by which the debtor earns his livelihood; clothing and certain prescribed household items, musical instruments, domestic stocks, household pets, wedding or engagement rings with a value not to exceed $5,000, and pensions, proceeds of and payments under annuity policies or plans, individual retirement accounts, all Keogh plans, all simplified employee pension plans and all other plans qualified under Sections 401 or 408 of the Internal Revenue Code.
Lien on Real Property
A lien on real property will prevent the judgment debtor from selling her real property or even refinancing it without having to pay the money owed. The process is similar to the writ of execution process above.
Lastly, there is a process called wage garnishment that allows for money to be taken directly out of the judgment debtor’s paycheck. The employer will withhold part of the judgment debtor’s weekly pay, up to, but no more than 25% of his or her weekly net pay.
Collecting on a judgment can be the hardest part of any lawsuit. That’s why many successful litigants ask an experienced attorney for help in getting a judgment debtor to pay. If you need help collecting a judgment in Louisiana, contact the experienced attorneys at Smiley Law today.