Civil courts issue monetary judgments all the time. The vast majority of those judgments will never be paid. Why? It is a combination of things that start with a lack of knowledge. Judgment creditors simply do not know what they are doing. Those who do are likely to leave collection efforts to an attorney or a collection agency.
Judgment Collectors, a Salt Lake City, UT, explains that specialized agencies who work exclusively on judgments are in the best position to help clients recover what is owed to them. More generalized collection agencies may not have the same level of skill or expertise.
The big question is when to bring in a collection agency. I would say right away. As soon as the court renders its decision, there ought to be plans to get a collection agency to work on the case. Should a judgment creditor decide to wait on bringing in an agency, there are telltale signs indicating when it is time to act. Here are some of them:
1. The Debtor Seems to Have Disappeared
Judgment Collectors says it’s not uncommon for experienced deadbeats to pack up and leave without providing forwarding information. Sometimes they move across town. Other times they move to a neighboring county or even across state lines. Unless a creditor knows how to find people trying to stay lost, this could prove to be a dealbreaker.
Fortunately, experienced collection agencies know how to take advantage of skip tracing. They know how to leverage a variety of resources to find people who do not want to be found.
2. The Debtor Doesn’t Seem to Have Any Assets
There are times when a judgment debtor legitimately has no assets of any value. He also doesn’t have sufficient income to pay the judgment against him. But what if a judgment creditor has reason to believe a debtor’s claim to no assets is false? What if the debtor’s lifestyle tells another story?
This is a good reason to bring in a collection agency inasmuch as skilled debt collectors know how to find unreported assets. Even assets a debtor is purposely trying to hide through shady deals are hard to keep covered up. A skilled debt collector knows which stones to turn over and which corners to look around.
3. The Effort Has Been Ongoing for Years
One of the most obvious signs that it is time to bring in a collection agency is having worked on the case for years without any success. Perhaps a creditor is in the fourth year of a judgment with a seven-year statute of limitations. Half the creditor’s time is already gone. Is the other half going to be wasted on the same failed collection efforts?
Time is the enemy in the judgment collection game. Every month a debtor can avoid paying is one month closer to never having to pay at all. Therefore, waiting three to four years before bringing in a collection agency just isn’t wise.
4. A Lack of Resources
Last but not least is a lack of resources to dedicate to collection. If a creditor can only put a limited amount of time and energy into collection efforts, those efforts are not going to get very far. Smart debtors know that. They will play the avoidance game for as long as it takes for the creditor to just give up.
I don’t get why judgment creditors try to collect on their own. The amount they save by not hiring professionals will be more than offset by the time and money they put into their own collections.
