I am not a lawyer, I am a Judgment Broker. This article is my opinion, and not legal advice, based on my experience in California. Laws vary in each state. If you ever need any legal advice or a strategy to use, please contact a lawyer.
Judgment recovery against a (judgment debtor) large nonprofit company, is done with the same tools as with any other corporate entity or business.
This article is about recovering judgments against (judgment debtor) small nonprofit entities. What if your judgment debtor is a nonprofit organization, or an officer in a nonprofit organization?
Whether a nonprofit organization is large or small, the process for levying an employee's wages at the entity remains the same. If an employee works for a nonprofit company, their wages can usually be levied.
If the nonprofit employer does not respond to the Sheriff's wage levy notification, one can sue the nonprofit employer for the amount that they should have withheld, when state laws permit.
Whether a nonprofit organization is a corporate entity registered with the Secretary Of State's office, or not; nonprofit organizations are less likely to pay salaries or dividends. Can their assets be levied to satisfy a judgment?
Nonprofit companies have no stock shares, and most small ones do not pay their officers with conventional incomes.
While one could pay a sheriff to levy a judgment debtor's office furniture, that is a very expensive way to recover a judgment. It could cost more than will be recovered at the Sheriff's auction sale.
It is usually very difficult to levy nonprofit asset distributions or dues, to recover a judgment, unless they could be proven to be fraudulent transfers. If that is the case, recovering would merely be difficult.
The term "nonprofit" means only that the structure of the entity is not for profit, and there are no shares or stock certificates. In almost every other way, a nonprofit company is run the same as any other business.
Some nonprofits, for example, Sesame Street, have a spin-off (for profit) corporation, which is where the money goes when one buys an Elmo doll.
Some larger and more "profitable" nonprofit organizations pay competitive wages, and sometimes offer matching with saving accounts funds. There could be a lot of money inside a nonprofit company.
One-person nonprofit organizations are sometimes used as a personal tax shelter, and occasionally there is some sort of scam going on.
In small nonprofit organizations, there might be a co-mingling of funds between the president of the nonprofit company and their personal checking account, treating the company as their personal piggy bank.
As with for-profit companies, nonprofits must keep their company minutes, have meetings, be registered with the Secretary Of State, keep separate business bank accounts, etc.
If they fail to comply with the requirements to be or stay a nonprofit company, they may lose their liability protection, and owe a lot of taxes.
If the nonprofit dissolves, maybe the creditors will get paid something upon the dissolution.
Judgment debtor exams and post-judgment document production requests, served on the nonprofit entity and perhaps third-parties, may turn up many clues to finding assets, that might be used to satisfy the judgment.
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