Winning a judgment against a debtor is an important step. However, collecting the money can be difficult when a business refuses to pay. Creditors may seek a writ of execution to seize business equipment and recover the debt. Before taking this step, they should review the law, the value of the equipment and the effect on the business.
Are there exemptions that protect the equipment?
Florida law provides certain exemptions from judgment collection, but business equipment does not automatically qualify for protection because it is used in a trade or profession. Available exemptions depend on whether the judgment debtor is an individual or a business entity and the circumstances involved.
Florida generally does not provide corporations and partnerships with the personal-property exemptions available to individuals. Creditors should also determine whether the equipment belongs to the judgment debtor or is leased, rented or owned by another party. Reviewing ownership and applicable exemptions before requesting a levy can help avoid legal disputes.
Will the equipment bring enough money?
Seizing equipment does not always lead to full payment. Machines, computers and special tools may lose value over time. They may also sell for less at an auction than they would in a normal sale.
Creditors must also consider the costs of seizure. These may include auction fees, storage charges and sheriff’s fees. These costs can reduce the amount recovered. Creditors generally must provide the sheriff with a deposit to cover enforcement fees and costs before the levy proceeds. Florida’s judgment collection guide explains the process and related costs.
How could seizure affect business operations?
Taking key equipment may prevent a business from doing its daily work. This could lead to lost income or even business closure. In some cases, this may make it harder for creditors to collect the debt.
A working business may have a better chance of paying what it owes over time. Creditors should consider whether a payment plan could bring a better result than taking equipment right away.
Making informed enforcement decisions
Equipment seizure can help creditors recover unpaid debts, but it requires careful planning. Creditors should review property exemptions, ownership rights, existing security interests, sale value and the impact on business operations before taking action. An attorney who handles judgment collection can help them choose the right steps and avoid unnecessary costs.