1. Maintain accurate records.  While this might seem basic, keeping accurate records on accounts is vital to increasing the likelihood of collections on delinquent accounts.  Without accurate records and the ability to provide a set amount that is due and owing, the courts will not award a judgment for the amount claimed to be owed.
  2. Obtain a personal guaranty.   When a contractual relationship begins with a business entity, obtaining a personal guaranty can not only help encourage payments but can also provide additional security for post-default collection efforts. If collection efforts can only be brought against a business entity such as an LLC or corporation, collections can be tricky because of their ability to close down shop quickly and because many do not have bank accounts in their respective names and to avoid post-judgment bank levies.
  3. Provide for prejudgment interest if applicable or post-default rate. If the subject agreement contains a provision for interest, the award of pre-judgment interest can usually be obtained and the rate in the agreement will normally govern, subject to the limitations of certain New Jersey statutes.  If there is no specific provision for interest, it is unlikely that a court will award this amount.
  4. Provide for the Recovery of Attorneys’ fees.   If the underlying contract or agreement between the parties provides for an award of attorneys’ fees upon default, this may be included in the judgment amount.  While this amount will be subject to the court’s discretion and the fees awarded will usually be limited to an amount deemed reasonable by the court based upon the services rendered, the inclusion of attorneys’ fees in the contract will bolster the argument for the award of such fees.
  5. Know your debtor.  Once judgment is obtained, a judgment creditor can initiate a bank levy, a personal property levy or constructive levy against property owned by the judgment debtor.  While this type of collection effort may involve additional costs, because of the costs incurred by the Sheriff’s office for scheduling an execution sale; if the value of the property is sufficient, it may be worth considering.  Real property levies are also available; however, first you must exhaust all personal property in the county in which the real property is located.  Usually, this can be done through use of an information subpoena which reveals that the debtor owns no personal property, has no job and holds no bank accounts.