Just because a debtor does not currently have assets does not necessarily mean that getting a judgment is a waste of time. A creditor could use a wage garnishment to collect as much as 25% of the debtor's take home pay. The debtor's financial situation could also change in the future. Judgment creditors will sometimes wait to see if the debtor inherits property, receives a tax refund or even wins the lottery. Once the judgment is recorded, it will show up automatically on the debtor’s credit report too.
Before I decided to focus my practice on representing debtors in bankruptcy, I did a decent amount of commercial debt collection. There are many ways that a judgment creditor can make a debtor’s life miserable even if they never collect on the judgment: http://blog.chs-law.com/2006/07/collecting-california-judgments.html.
Lawsuits can be scary. Bankruptcy can stop creditor harassment immediately so you don’t have wonder if the county sheriff will show up at your job to serve your employer with a wage garnishment. If you are in Southern California and involved in a debt collection lawsuit, call me today at (619) 448-2129 for a free consultation.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar, the San Diego County Bar Association and the National Association of Consumer Bankruptcy Attorneys. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.