DIY judgment collection is fairly common. Both individuals and businesses often choose in-house collection hoping to save money. It is a fine strategy when things work out. But when they don’t, DIY collection can become a nightmare. And unfortunately, the second scenario is more likely for most judgment creditors.
Have you already begun trying to enforce a money judgment on your own? If so, how would you know that it’s time to hire a judgment collection firm to take over? There is no black-and-white answer. But there are plenty of clues to point you in that direction.
5 Scenarios to Consider
Judgment Collectors is a Utah judgment collection firm based in Salt Lake City. The firm works on cases in eleven states. They explain that every case is different. So rather than looking for a one-size-fits-all solution, they recommend considering the following five scenarios:
1. A Persistently Unresponsive Debtor
Successful enforcement relies heavily on a debtor offering at least some level of responsiveness – even if that responsiveness is a direct result of compulsion. When a debtor persistently fails to respond, he makes a judgment creditor’s job exceptionally hard. Is that what you are facing right now?
2. All In-House Efforts Have Failed
Despite their best efforts, so many DIYers ultimately fail to collect anything. Such is the irony of going to civil court to get a judgment. Regardless, it makes little sense to continue doing the same things but expecting different results. If all your previous collection efforts have failed, perhaps it’s time to bring in a professional.
3. A High Judgment Value
DIY collection might be warranted on judgments of low value. Think judgments of up to a few thousand dollars obtained in small claims court. But a creditor looking at a sizable judgment is facing a different scenario. A higher value more than justifies the contingency fees associated with hiring a collection firm.
4. A Threat to Declare Bankruptcy
Debtor bankruptcy is the judgment creditor’s worst nightmare. Bankruptcy can wipe out most money judgments unless proactive steps are taken to ensure a creditor’s interests. A big advantage judgment collection firms have is the ability to respond to a threat of bankruptcy preemptively.
5. Pursuing a Debtor Out-of-State
The final scenario involves pursuing a debtor out-of-state. To avoid payment, perhaps the debtor packed up and moved elsewhere. They can still be pursued in the new state of residence, but only after the judgment has been domesticated. Do you think you can handle domestication and long-distance collection efforts? If not, a judgment collection firm could be your best option.
What a Professional Firm Does
A judgment collection firm either purchases judgments as assets or works on contingency. It makes a difference. An agency willing to buy judgments only pays pennies on the dollar. In addition, selling your judgment would mean relinquishing all collection rights. Once the transaction is complete, the collection agency becomes the new owner of the debt.
As for an agency that works on contingency, like Judgment Collectors, it becomes an agent working on your behalf. You retain ownership of the debt along with all its rights and obligations. Meanwhile, the collection agency:
- Conducts an income and asset search.
- Makes contact with the debtor.
- Pursues any additional legal recourse.
- Works out payment details.
Essentially, the agency working on contingency takes over the entire case. You do not need to do anything other than wait to get paid. If you are struggling to collect a judgment in-house, take a serious look at hiring a judgment collection firm.