Should I Assign My Small Claims Judgment?
Pros & Cons.
You won a judgment in small claims. Congratulations!
But your debtor still won’t pay you. Now what?
More court forms, more fees, and playing detective to find out where the debtor moved, what assets they have or how they earn income.
Small claims in California are $10,000 or less, so some creditors feel it’s not worth the effort if the debtor refuses to pay.
If you feel the debtor can afford to pay, but just won’t, and is being difficult to track down, then you have to consider whether all that effort will be worth it. If you decide it’s not, then consider getting at least some of your money for no effort at all by assigning the judgment to someone else.
No more paperwork.
Ordering the debtor back to court for an examination hearing, putting liens on property, garnishing wages and bank accounts--all of this requires paperwork with not only the court, but other agencies. And you’ll have to find out which forms you need, how to fill them out correctly, and the correct agency to file with.
No more fees.
A lot of that paperwork requires up front fees. And even though you can add those fees to the cost of what the debtor owes, that requires still more paperwork! And you’re out that money until and if, the debtor pays.
No more court appearances.
If investigation efforts into the debtor’s ability to pay have failed, you can order them back to court for an examination hearing to ask for their bank account information, where they work, what property they have, etc. This of course, costs a fee to the court, and another day off work for you.
No more chasing the debtor.
Unless you like playing detective in your free time.
You will only get a percentage--typically half--of whatever the assignee can collect.
But if you were ready to give up anyway...
Conclusion: If you've given up trying to collect your small claims judgment, by all means, assign it!