🏢 How to Collect a Judgment Against a Business

Collecting a judgment against a business entity presents unique challenges and unique opportunities that differ significantly from collecting against an individual person. When your judgment is against an LLC, corporation, partnership, or other business entity, you’re dealing with a legal fiction—an entity that exists through its charter documents, its assets, and its legal rights, but that can be dissolved, restructured, renamed, reorganized, or stripped of assets in ways that individual human debtors simply cannot easily replicate. Understanding these fundamental differences is absolutely critical to developing an effective collection strategy that maximizes your recovery. 🏢

The primary challenge is limited liability. When you have a judgment against “ABC Construction LLC,” you can only collect from the LLC’s assets—not from the personal assets of the LLC’s owner, members, or managers. The LLC’s bank account, equipment, vehicles, real property, accounts receivable, inventory, intellectual property, and other business assets are all fair game for your enforcement efforts. But the owner’s personal home, personal bank account, personal vehicles, retirement accounts, and personal investment portfolio are generally protected behind the corporate veil. This fundamental separation is why many business debtors simply strip their entity of assets, redirect revenue elsewhere, and dare you to collect from an empty shell—knowing that their personal wealth remains untouchable absent a successful veil-piercing action.

The primary opportunity is that businesses have asset types that individuals don’t—accounts receivable (money owed to the business by its customers), commercial equipment, inventory, intellectual property, business licenses, and ongoing revenue streams. These assets can be identified through professional business searches and seized through targeted enforcement. And when the owner has abused the entity form, alter ego liability lets you break through the corporate veil and reach the owner’s personal assets to satisfy the business judgment.

The first and most critical step in successfully collecting a business judgment is identifying what the business actually owns and where those assets are located. Many businesses have significantly more assets than they initially appear to possess—the key is knowing exactly where to look and using the right combination of investigative tools and legal processes: 🔍

• 🏦 Bank accounts: Every operating business has at least one bank account, and many have multiple accounts at different institutions. A business asset search can identify banking relationships, and third-party subpoenas to banks reveal account balances, transaction histories, and the timing of deposits (critical for timing your levy). Bank levies are often the single most effective collection tool against operating businesses because the accounts receive regular deposits from business operations.
• 🏠 Real property: Commercial property, office buildings, warehouses, retail locations, and land owned by the business. Our property search identifies all real estate holdings across all 50 states. Judgment liens on business real property prevent sale or refinancing without paying your judgment.
• 🚗 Vehicles and equipment: Company cars, trucks, construction equipment, machinery, and other titled vehicles. A vehicle search reveals all vehicles registered to the entity. Heavy equipment and specialized machinery can have significant value that creditors often overlook.
• 📋 Accounts receivable: Money owed to the business by its customers and clients is a collectible asset. Through discovery, you can identify the business’s customers and the amounts owed, then garnish those receivables directly—the customers pay you instead of the debtor business. This is particularly effective against service businesses with large outstanding invoices.
• 📊 UCC filings: Uniform Commercial Code filings reveal what assets the business has pledged as collateral for loans. While these assets are subject to prior security interests, UCC records also reveal assets you might not know about—equipment, inventory, and accounts that the business borrowed against but that may have substantial equity beyond the secured debt.
• 💻 Intellectual property: Trademarks, patents, copyrights, domain names, software, customer lists, proprietary processes, and other IP can have significant and sometimes surprising value. These assets are frequently overlooked by judgment creditors but can be identified through federal trademark and patent databases (USPTO), domain registration records (WHOIS), software license agreements, and comprehensive discovery requests. A business’s website domain alone can be worth thousands of dollars, and trademarks associated with an established brand can be worth significantly more.
• 🏢 Interests in other entities: The business may own membership interests in other LLCs, stock in other corporations, or partnership interests in other ventures. These ownership interests are themselves assets that can potentially be reached through charging orders (which redirect distributions from those entities to you) or, in some states, through direct levy or foreclosure of the ownership interest. Our business entity search reveals all entities associated with the debtor business and its principals, mapping the full network of related entities and identifying where assets and revenue may be flowing.

Once you’ve identified what the business actually owns through investigation and professional searches, here are the primary enforcement mechanisms available to judgment creditors for seizing those business assets and converting them into payment on your judgment: 💰

Accounts receivable garnishment is one of the most powerful but underutilized collection tools against operating businesses. While most creditors focus on bank account levies, accounts receivable often represent far more money than what’s sitting in a bank account at any given moment. Here’s how to leverage this powerful tool: 📋

• 📊 Identify the business’s customers. Through interrogatories and debtor examinations, compel the business to disclose all customers who owe money, the amounts owed, and payment terms. Also examine the business’s website, marketing materials, and social media for customer references and client lists. For construction companies, public building permits identify project locations and property owners who may owe the company money.
• 📬 Serve garnishment writs on customers. Once you’ve identified customers who owe the debtor business money, serve garnishment writs directly on those customers. Instead of paying the debtor business, the customers must pay you. This diverts the business’s revenue stream directly to you without the business having any ability to prevent it.
• 🔄 Ongoing receivable garnishment. Unlike bank levies that capture only the balance at one moment, accounts receivable garnishment can be structured as ongoing—capturing all future payments from a particular customer until your judgment is satisfied. This creates a continuous payment stream, particularly effective against businesses with long-term contracts or recurring service agreements.
• 💰 Government contracts and payments. If the debtor business has government contracts or is owed money by any government agency, these receivables are often the most reliable to garnish because government entities comply promptly with garnishment orders and pay on predictable schedules.

🏢 LLCs (Limited Liability Companies)

LLCs are the most common business entity type you’ll encounter as a judgment creditor, and they represent the vast majority of business judgment collection cases in the modern economy. Collection from an LLC follows the standard process: identify all assets through professional searches and discovery, file writs of execution, levy bank accounts timed to maximum deposit periods, lien real property, and garnish accounts receivable from the LLC’s customers and clients. The LLC’s operating agreement may restrict asset transfers and distributions between members, but these internal restrictions do not apply to court-ordered enforcement actions—your judgment supersedes private agreements between members. If the LLC is a single-member entity and the owner has treated it as a personal alter ego—commingling personal and business funds, ignoring all governance formalities, undercapitalizing the business from formation—aggressively pursue veil piercing to reach the owner’s personal assets. Single-member LLCs are the easiest entities to pierce because there are no other innocent members whose interests require the court’s protection.

🏛️ Corporations

Corporations are collected against using the same basic enforcement tools as LLCs—bank levies, property liens, equipment seizure, receivable garnishment, and assignment orders. However, corporate formality requirements are more extensive than LLC requirements (board meetings, shareholder meetings, detailed minutes, formal bylaws, officer elections, and annual filings), which actually creates more opportunities for veil-piercing claims when these formalities weren’t properly maintained. Closely-held corporations with a single shareholder who runs the business as a personal operation without ever convening a board meeting or keeping minutes are particularly strong candidates for alter ego liability. Check whether the corporation has filed its required annual reports with the Secretary of State—administrative dissolution for failure to file can affect the corporation’s legal standing and may create additional collection opportunities or weaken the owner’s liability protection arguments.

🤝 Partnerships

General partnerships are by far the easiest business entities to collect from because general partners are personally liable for all partnership debts—no veil piercing needed. You can collect from both the partnership’s assets and each general partner’s personal assets simultaneously, dramatically expanding the pool of available assets. This eliminates the most significant challenge in business collection: the limited liability barrier. For limited partnerships, limited partners are generally only liable up to their investment amount, but general partners remain personally liable for everything. Use our asset search to identify both partnership assets and the personal assets of every general partner—then enforce against whichever assets are most accessible and valuable.

🏗️ Sole Proprietorships (DBA)

If your judgment names a “doing business as” entity (DBA or trade name), there’s actually no separate legal entity involved whatsoever—the owner IS the business, and the business IS the owner. They are legally identical. You can pursue the owner’s personal assets directly using every standard individual collection tool available, just as you would with any personal judgment debtor. Garnish wages from any other employment the owner may have, lien personal real property including their home, and levy personal bank accounts in addition to the business account—no veil piercing required because there is no veil to pierce. The DBA is simply a trade name, not a liability shield.

Limited liability generally prevents you from collecting a business judgment directly from the owner’s personal assets. However, several important legal exceptions allow you to break through this protection and reach the owner’s personal bank accounts, home, vehicles, and other personal property: 🔓

• ⚖️ Alter ego / veil piercing: If the owner commingled personal and business funds, failed to maintain corporate formalities, undercapitalized the entity, or used it as a mere shell, the court may pierce the corporate veil and hold the owner personally liable. This is the most common method for reaching business owners and should be evaluated in every case where the entity appears asset-poor while the owner appears asset-rich.
• 📋 Personal guarantees: If the owner personally guaranteed the obligation underlying your judgment (common in commercial leases, vendor contracts, and loan agreements), the guarantee creates a separate basis for personal liability independent of the entity. You may need to obtain a separate judgment on the guarantee or amend your existing judgment to add the owner as a guarantor.
• 🤥 Personal fraud or tortious conduct: Officers and directors who personally participated in fraudulent conduct or tortious acts can be held personally liable regardless of the corporate form. If the owner personally committed the fraud or tort that gave rise to your judgment, limited liability may not protect them.
• 🔄 Fraudulent transfers: If the owner stripped the entity of assets through fraudulent transfers—transferring business property, accounts, or revenue to themselves or family members for below-market value—you can pursue the owner for the value of the transferred assets.
• 💰 Excessive distributions and self-dealing: If the owner received distributions, bonuses, salary, or other payments from the entity while the entity was insolvent or while your judgment was outstanding and unpaid, some states allow creditors to pursue the owner for the value of those distributions. The theory is that the owner extracted money that should have been available to pay creditors, which is essentially a form of self-dealing that prejudices your rights. Discovery of the entity’s financial records, including its general ledger, bank statements, and tax returns, reveals whether distributions were made that rendered the entity unable to pay its debts and left your judgment unsatisfied while the owner profited.

Business judgment collection presents specific obstacles that require strategic responses: 🚧

• 📉 Asset stripping after judgment. The most common tactic: the owner drains the business account, stops paying the business’s bills, and lets the entity become an empty shell. Your response: investigate immediately after judgment entry—run your asset search and begin discovery before the owner has time to strip assets. If assets have already been moved, pursue fraudulent transfer claims to reverse the transfers and alter ego claims to reach the owner personally.
• 🔄 Revenue redirection. The owner diverts the business’s revenue to a new entity, a personal account, or a family member’s account while the judgment debtor entity receives nothing. Through bank record subpoenas and debtor examinations, trace where the revenue went. Assignment orders can redirect specific income streams to you. If the revenue was diverted to a new entity, successor liability claims may allow you to pursue the new entity directly.
• 🏢 Nominee ownership. The debtor operates the business through entities nominally owned by a spouse, child, or friend. Our business entity search identifies these relationships through officer overlaps, shared addresses, and formation patterns. Discovery can compel the debtor to disclose all entities they control or benefit from, regardless of whose name appears on the formation documents.
• ⚖️ Secured creditors with priority. Banks and other secured lenders often have first-priority security interests in the business’s assets. When you levy equipment or inventory that’s subject to a UCC security interest, the secured creditor’s claim takes priority over yours. Check UCC filings before spending money on equipment levies to ensure there’s equity available beyond the secured debt. Bank account levies are generally not subject to this issue because most business checking accounts are not pledged as collateral.
• 💼 The business claims it’s judgment-proof. The business asserts that all its assets are exempt or encumbered, that it has no revenue, and that collection is futile. Don’t take their word for it. Conduct independent investigation through professional searches, subpoena bank records to verify the claimed poverty, and schedule a debtor examination to question the principal officer under oath. Businesses that claim to be judgment-proof are often still generating substantial revenue that the owner is simply redirecting elsewhere.
• 📋 Multiple creditors competing for limited assets. If other creditors have judgments against the same business, you may be competing for the same pool of assets. Priority generally goes to the creditor who first recorded a lien or served a levy. Act quickly—being first to enforce can mean the difference between full recovery and getting nothing. Record your liens and serve your levies as soon as possible after judgment.

Business entity debtors very frequently attempt to escape judgments by dissolving the entity or starting a new business under a different name. Neither common tactic actually eliminates your judgment: 🔄

💀 Dissolved Entities

When a business dissolves—whether voluntarily by the owner or through administrative action by the state—it does not escape your judgment. The dissolution process requires the entity to pay its debts before distributing any remaining assets to owners. If the entity distributed assets to owners without first paying your judgment, you can pursue the owners personally for the value of the distributions they received, up to the amount of your judgment. This liability exists regardless of whether the owner engaged in alter ego conduct—it’s a separate theory based on improper distribution of assets during dissolution. Many states also allow you to pursue “winding up” proceedings against dissolved entities to ensure proper distribution of remaining assets to creditors before anything flows to the owners.

Importantly, a business that dissolves to avoid your judgment may also face fraudulent transfer liability if the dissolution and asset distribution were undertaken specifically to defeat your collection rights. The timing of the dissolution relative to your judgment is critical evidence: a company that dissolves and distributes all assets to the owner within weeks of judgment entry has clearly done so to avoid the judgment, strengthening both your fraudulent transfer and distribution liability claims.

🏢 Successor Entities — The Phoenix Company Problem

If the owner shuts down the judgment-debtor entity and opens a new one doing the same business with the same customers, employees, and equipment, the new entity may be liable for the old entity’s debts under successor liability theories. Courts look for continuity of ownership, management, employees, customers, physical location, and business operations. If “Smith Construction LLC” closes and “Smith Building Services LLC” opens at the same address with the same owner, same workers, same phone number, and same customer list, the new entity is likely the old entity’s successor and your judgment may be directly enforceable against it.

Our business entity search is invaluable for identifying successor relationships because it reveals all entities connected to the same owner, their formation dates, registered addresses, and registered agents. When the debtor entity’s principal forms a new entity just before or just after the old entity ceases operations, the timeline speaks volumes about the new entity’s true purpose. Combining this evidence with discovery showing that the new entity took over the old entity’s contracts, customers, and operations creates a compelling successor liability case that allows you to enforce your original judgment against the new entity without needing to re-litigate the underlying claim.

📋 Revived Entities

Some entities are administratively dissolved or suspended by the state for failure to file annual reports, pay franchise taxes, or maintain a registered agent. In most states, these entities can be revived by filing back reports, paying outstanding fees and penalties, and updating their registered agent information. Your judgment remains valid and fully enforceable against the entity even during the period of administrative dissolution or suspension, and the entity’s assets remain subject to your enforcement actions throughout. An administratively dissolved entity is not truly dead or gone—it’s simply delinquent on its government paperwork, and its debts and obligations (including your judgment) survive fully intact regardless of its current filing status with the Secretary of State.

📋 Scenario 1: The Operating Business With Assets

You have a $95,000 judgment against a plumbing company LLC. Your business search reveals the company owns a commercial property (shop/warehouse), four service vehicles, and has active operations with a full customer list. You immediately record a judgment lien on the commercial property, preventing sale or refinancing. Through discovery, you identify the company’s bank and its three largest commercial customers. You time a bank levy to coincide with a large customer payment, capturing $38,000. Simultaneously, you serve receivable garnishments on the three commercial customers, diverting an additional $4,200 per month in payments directly to you. Within 14 months, your judgment is fully satisfied through the combination of the initial bank levy and ongoing receivable garnishment—without ever needing to address veil piercing or pursue the owner personally.

📋 Scenario 2: The Empty Shell With a Wealthy Owner

You have a $150,000 judgment against a consulting LLC. The LLC has $800 in the bank, no property, no equipment, and claims no receivables. But the sole member-owner lives in a $700,000 house, drives a luxury SUV, and recently took his family on a European vacation. Your asset search reveals the owner’s personal wealth, and your discovery reveals devastating alter ego evidence: the owner paid his personal mortgage, car payment, children’s tuition, and vacation expenses directly from the LLC’s bank account. The LLC never had an operating agreement, never held meetings, and was formed with only $100. You file an alter ego motion, present the commingling evidence, and the court pierces the veil. You now pursue the owner’s personal assets—recording a lien on his house, garnishing his wages from a separate employer, and levying his personal bank accounts. Total recovery: $150,000 plus interest.

📋 Scenario 3: The Phoenix Company

You have a $75,000 judgment against Apex Builders Corp. The corporation suddenly closes, and within a week, “Apex Construction LLC” opens at the same address with the same owner, the same employees, and the same phone number. The new LLC even serves the same customers and uses equipment that belonged to the old corporation. Your business search confirms the successor relationship: same owner, same registered address, overlapping dates. You pursue successor liability against the new LLC and alter ego liability against the owner personally. The court finds the new LLC is a mere continuation of the old corporation and holds both the new LLC and the owner liable for your judgment. Assets from both the new entity and the owner personally become available for collection.

Effective and efficient collection against a business entity requires a systematic, multi-pronged approach that strategically combines investigation, legal discovery tools, and targeted enforcement actions: 🎯

• 🔍 Step 1 — Investigate thoroughly. Order a business entity search and comprehensive asset search on both the entity AND the owner personally. Understanding the full asset picture—entity assets plus personal assets—lets you develop the most effective strategy, whether that’s direct enforcement against entity assets, veil piercing to reach personal assets, or both simultaneously.
• 📋 Step 2 — Conduct aggressive discovery. Use interrogatories to compel disclosure of all entity assets, bank accounts, receivables, and recent transactions. Subpoena bank records directly from the entity’s banks. Schedule a debtor examination of the entity’s principal officer. Thorough discovery reveals assets that even professional searches may not capture and builds the evidentiary foundation for veil-piercing claims if needed.
• ⚡ Step 3 — Act fast with enforcement. Business assets are more mobile than personal assets—bank accounts can be drained in hours, equipment can be moved, and revenue can be redirected to new entities. Once you identify assets, enforce immediately: levy bank accounts, record liens, and garnish receivables before the owner has time to move assets out of the entity. Speed is even more critical for business judgments than personal judgments.
• 🔓 Step 4 — Evaluate veil piercing. If entity assets are insufficient to satisfy your judgment, evaluate whether the evidence supports alter ego liability. Look for commingling, lack of formalities, undercapitalization, and siphoning. If the evidence is strong and the owner has personal assets worth pursuing, file a veil-piercing motion or separate action. This transforms an uncollectible business judgment into a collectible personal judgment.
• 📅 Step 5 — Monitor continuously. Keep the judgment renewed and interest accruing. Run periodic asset searches to identify new entity assets or changes in the owner’s personal financial situation. A business that’s struggling today may be thriving tomorrow, and the owner who was judgment-proof last year may have acquired substantial personal assets since then. Persistence pays.

Whether you’re pursuing an active operating business with identifiable revenue streams and assets or an apparently empty shell controlled by a wealthy owner who has stripped it clean, the combination of professional investigation, aggressive discovery, targeted enforcement, and strategic veil piercing gives you comprehensive tools to turn your business judgment into actual monetary recovery. Remember that business judgments actually have some advantages over personal judgments: businesses have fewer exempt assets, accounts receivable can be garnished directly from customers, and many business owners have committed multiple alter ego violations without ever considering the consequences. The cost of walking away from a business judgment without exhausting your available options is the entire judgment amount plus all accumulated interest—which can be tens or hundreds of thousands of dollars lost. With professional asset search services delivering results in 24 hours or less, you can quickly and affordably determine whether collection is viable and where to focus your enforcement efforts before committing significant legal resources to the process.