To file a money suit and enforce a judgment, you pick a court with authority over the defendant, file a complaint that spells out what you’re owed, serve the defendant properly, and prove your case through documents and testimony. Winning is only the first half. Collecting means going back to court for tools like wage garnishment, bank levies, and property liens, and sometimes hunting down assets the debtor would rather you not find. The whole process can run months or years, and every stage has deadlines that will kill your claim if you miss them.
Choosing the Right Court
Where you file matters. A court needs authority over the defendant, which usually means the jurisdiction where the defendant lives, does business, or where the contract was signed or breached. File in the wrong court and the defendant gets an easy dismissal before anyone looks at the merits.
The amount you’re claiming drives which level of court you use. Small claims courts handle lower-value disputes with simplified rules and no need for a lawyer. Caps vary widely, from a few thousand dollars in some states up to $25,000 in others. Above the cap, you file in a general civil court, where procedures are more formal and timelines longer.
When the plaintiff and defendant are from different states and the amount exceeds $75,000, the case can go to federal court under diversity jurisdiction.1Office of the Law Revision Counsel. 28 U.S. Code 1332 – Diversity of Citizenship; Amount in Controversy; Costs If you already have a judgment from one state and need to enforce it against a debtor in another, nearly every state has adopted a streamlined registration process that avoids relitigating the case.
The Deadline to File
Every money claim has a statute of limitations. Miss it and you lose the right to sue permanently, regardless of how strong the evidence is. For breach of contract, the most common type of money suit, the window in most states runs three to six years from the date of the breach, though a handful of states allow up to ten. Tort-based claims like fraud or conversion often have shorter deadlines. If you’re anywhere close to the cutoff, file first and refine the details later.
Evidence That Wins Money Cases
A money suit lives or dies on documentation. For a contract dispute, that means the contract itself along with invoices, payment records, and written communications showing what was agreed and what went wrong. For promissory notes or personal loans, the signed note and payment records are the backbone. Bank statements prove both the original transfer and any partial payments made along the way.
For tort claims like fraud or property damage, you need evidence connecting the defendant’s conduct to your financial loss: appraisal reports, repair estimates, expert opinions, photographs. Keep a chronological timeline. Gaps in the paper trail are where defendants find room to argue.
Filing the Complaint and Serving the Defendant
The lawsuit begins when you file a complaint with the court. It identifies you and the defendant, explains what happened, states the legal basis for the claim, and specifies the amount you’re seeking. You’ll pay a filing fee at submission, typically a few hundred dollars for general civil cases.
After filing, the court issues a summons that formally notifies the defendant and sets a deadline to respond.2Legal Information Institute. Federal Rules of Civil Procedure Rule 4 – Summons You’re responsible for getting the summons and complaint delivered through a legally acceptable method, usually a process server or certified mail depending on the jurisdiction. Simply mailing the papers to the defendant’s last known address is usually not enough.3Legal Information Institute. Service of Process Defective service means the court won’t proceed and you’ll start over.
What the Defendant Does Next
The Response
Once properly served, the defendant has a limited window to respond. In federal court, that’s 21 days from service.4United States Courts. Federal Rules of Civil Procedure State courts set their own deadlines, commonly 20 to 30 days. The answer can admit or deny the allegations, raise defenses like the statute of limitations or prior payment, or include counterclaims arguing the defendant is actually the one owed money.
Default Judgment
If the defendant ignores the lawsuit and blows the response deadline, you can seek a default judgment. The clerk first records that the defendant is in default. Then, if the amount owed is a fixed and calculable sum, the clerk can enter judgment; otherwise the judge holds a hearing to determine damages.5Office of the Law Revision Counsel. Federal Rules of Civil Procedure Rule 55 – Default A default judgment is enforceable like any other, but courts can set it aside if the defendant shows good cause for missing the deadline.
Discovery
If the defendant does answer, the case moves into discovery, where both sides exchange information before trial. Discovery tools include written questions the other side must answer under oath, requests for documents, and depositions where witnesses answer questions in person.6Legal Information Institute. Discovery The scope is broad. In federal court you can request anything relevant to the claims or defenses that isn’t protected by attorney-client privilege. Most cases are won or lost here, because the documents and testimony gathered decide whether a case settles or goes to trial.
Settlement and Pre-Trial Options
Most money suits settle before trial. Settlement can happen at any point, from right after filing through the middle of trial. A typical deal has the defendant paying a specific amount in exchange for the plaintiff dropping the case. Courts actively encourage this because it clears dockets and gives both sides certainty.
Mediation and arbitration offer structured alternatives. In mediation, a neutral mediator helps both sides negotiate but cannot impose a decision. In arbitration, an arbitrator hears evidence and issues a decision that is typically binding.7FINRA. Overview of Arbitration and Mediation Many commercial contracts include mandatory arbitration clauses, so check your agreement before filing in court.
One settlement tool that catches plaintiffs off guard is a formal offer of judgment. Under federal rules, a defendant can serve a written offer to settle for a specific amount. If the plaintiff rejects it and then wins less at trial than the offer, the plaintiff must pay the defendant’s costs incurred after the date of the offer.8Legal Information Institute. Federal Rules of Civil Procedure Rule 68 – Offer of Judgment That penalty makes it risky to turn down a reasonable offer while chasing a bigger verdict.
Enforcing the Judgment
Winning does not put money in your account. If the debtor won’t pay voluntarily, and many won’t, you use the court’s enforcement tools. This is where creditors get frustrated, because enforcement takes additional filings, fees, and sometimes detective work to locate assets.
Wage Garnishment
A wage garnishment order directs the debtor’s employer to withhold part of each paycheck and send it to you. Federal law caps the garnishment at the lesser of 25 percent of disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage.9Office of the Law Revision Counsel. 15 U.S. Code 1673 – Restriction on Garnishment Some states impose tighter limits. Garnishment works well against a debtor with steady employment and does nothing against someone self-employed or paid in cash.
Bank Account Levies
A bank levy freezes the debtor’s checking or savings account and directs the bank to turn over funds toward the judgment. You get a court order, serve it on the bank, and the bank puts a hold on available funds. If the debtor doesn’t successfully challenge the levy, the money is released to you. The hard part is knowing where the debtor banks.
Property Liens
You can place a lien on real property the debtor owns by recording the judgment with the county land records office where the property sits. The lien doesn’t force an immediate sale, but it attaches to the property. If the debtor tries to sell or refinance, your lien has to be satisfied first. In some cases you can ask the court to order a forced sale, though courts are reluctant to do this for a primary residence.
Finding the Debtor’s Assets
If you don’t know what the debtor owns or where they bank, you can request a debtor’s examination, sometimes called an examination in aid of execution. The court orders the debtor to appear and answer questions under oath about income, bank accounts, property, and other assets. The debtor can’t use the hearing to relitigate whether the money is owed. It’s purely about ability to pay. Failing to appear or refusing to answer can result in civil contempt, with fines or even jail time.10Justia. Debtor Examinations in Creditor Judgment Collection You can also subpoena records directly from banks and employers, which sometimes works better because it prevents the debtor from moving assets before the exam.
Assets You Can’t Touch
Not everything the debtor owns is fair game. Federal and state laws shield certain assets from judgment collection, and knowing the limits saves wasted effort.
Social Security benefits cannot be garnished or levied to satisfy most civil judgments. No money paid under Social Security is subject to execution, levy, attachment, or garnishment.11Office of the Law Revision Counsel. 42 U.S. Code 407 – Assignment of Benefits Once deposited into a bank account, benefits retain that protection for a limited period, though the rules get complicated when the account mixes Social Security with other income.
Retirement accounts held in ERISA-qualified plans like 401(k)s and pensions are also protected from most judgment creditors, with narrow exceptions for domestic support obligations and certain tax debts. IRAs get some federal protection in bankruptcy, but protection outside bankruptcy depends on state law.
Most states also provide a homestead exemption covering some or all of the equity in the debtor’s primary residence, along with exemptions for basic personal property, tools of the debtor’s trade, and a portion of wages beyond the federal garnishment limit. The specifics vary dramatically state to state.
How Long a Judgment Lasts
Judgments expire. Every state sets a period, and if you don’t collect or renew before that deadline, you lose the right to enforce it. Ten years is the most common expiration and applies in roughly half the states. Some states allow as few as five years, others up to twenty. Find your state’s deadline and put it on a calendar.
Renewal typically involves filing an application or affidavit with the court that entered the original judgment, serving notice on the debtor, and paying a small fee. Some states let you renew at any time before expiration; others make you wait until a set number of years have passed. Missing the renewal deadline is one of the most common and most preventable ways creditors lose the right to collect.
Interest on Unpaid Judgments
Most judgments accrue interest from the date they’re entered, so the amount owed grows over time. In federal court, post-judgment interest runs at a rate equal to the weekly average one-year Treasury yield for the week before the judgment, compounded annually.12Office of the Law Revision Counsel. 28 U.S. Code 1961 – Interest State courts use their own rates, either fixed by statute or tied to a market benchmark. On a judgment that takes years to collect, the interest adds up faster than most people expect.
Tax Consequences of What You Collect
The IRS treats different types of judgment proceeds differently, and ignoring taxes can eat a significant chunk of the recovery. Damages received for personal physical injuries or physical sickness are excluded from gross income, but punitive damages are always taxable, even in a physical injury case.13Office of the Law Revision Counsel. 26 U.S. Code 104 – Compensation for Injuries or Sickness
Emotional distress damages are taxable unless they stem from a physical injury. Lost wages recovered in an employment lawsuit are taxable as wages, subject to income tax withholding and payroll taxes. Lost business profits are taxable as self-employment income.14Internal Revenue Service. Publication 4345 – Settlements Taxability Interest included in a judgment is always taxable as interest income. If you settle rather than take a verdict, the allocation of the payment between taxable and non-taxable categories matters. Write the allocation into the settlement agreement rather than leaving it for the IRS to decide.
If the Other Side Appeals
A party who believes the trial court made a legal error can appeal. Appeals focus on whether the law was applied correctly, not on re-weighing evidence or hearing new testimony. In federal civil cases, the notice of appeal must be filed within 30 days of the judgment.15Legal Information Institute. Federal Rules of Appellate Procedure Rule 4 – Appeal as of Right, When Taken Miss it and you’ve almost certainly waived the right to appeal. State deadlines vary but are similarly strict.
The appellant files a written brief arguing why the lower court got it wrong, the other side files a response, and the appellate court may hear oral arguments. The result can be an affirmance, a reversal, or a remand sending the case back to the trial court.
If you won at trial and the loser appeals, the appeal can delay collection for a year or more. To protect yourself, ask the court to require the appellant to post a supersedeas bond, sometimes called an appeal bond. The bond guarantees money is available to pay if the judgment is upheld. Filing it also temporarily stops the winning party from enforcing the judgment during the appeal, which protects the appellant from paying on a judgment that might be reversed and protects you from the appellant hiding or spending assets while the case is pending.