When civil litigation begins, the client wants his day in court and believes that once he wins, the defendant (person or company he is suing) will hand over the money owed.
However, this is not the case. Winning does not guarantee collection. That is why it can be crucial, even before you start your litigation, to review the defendant’s possibility of collection.
You may have win a case. But that doesn’t mean that they will pay you. A judgment in your favor that awards you money is basically a piece of paper that says they owe you money.
Example of civil lawsuit
The case pits Juan Arturo Gutiérrez against his two nephews. Juan Luis Bosch and Dionisio Gutierrez who now control the Guatemalan conglomerate Corporación Multi-Inversiones (CMI). That means they have a way to pay if lose.
Arturo Gutierrez formed a company called Lisa S.A., stating that his nephews stole millions of dollars from him since he gave up control of the conglomerate in 1982. The case ended up by the Judge repudiating the defamation campaign led by Lisa, S.A.
So, Lisa S.A had to compensate Avicola Villalobos for $2. 6 million in litigation costs.
Collecting that judgment is an entirely different story. It can often take months or years to collect, if ever. So, it is important that you and your lawyer determine whether a case is worth filing, or at least what the strategy will be considering the possibility of collecting.
Things to consider when placing a civil lawsuit to a person or company
- Own a property
- A fixed income
- Insurance that covers the claim
- Having another lawsuits against
- Likelihood that the person you are suing will file for bankruptcy
Assuming you decide to go ahead with your case, the person or business you are suing has assets. And in fact you win your case, you still have a long way to go before they pay you.
The first step is to try to reach an agreement with the defendant regarding the payment or, sometimes, to establish a payment plan. Generally, if the defendant agrees to a payment plan or an amount, they are more likely to pay.
However, in situations where an agreement is not possible, you can seek collection for your judgment using a wide variety of options.
If you know the defendant’s assets, such real estate, you can place a lien on the property that will secure your judgment. You can also place a wage garnishment, for which they pay you a percentage of their income, usually 25% of gross wages.
After winning a case, there are still post-trial proceedings that must be carried out and collect efforts if the party you obtained a judgment against is unwilling to pay the amount.
Litigation is expensive, complex, and requires many factors to be considered. It is really important that you seek for legal advice and are fully aware of your likelihood of collecting before starting a case.