Why Companies Fail Where Judgment Collectors Succeed
More than one company has turned to civil litigation in hopes that winning a lawsuit would finally mean getting paid by a deadbeat customer, only to find out that obtaining a judgment is only the start. Unfortunately, too many companies who attempt to collect in-house fail to do so. On the other hand, professional judgment collectors are more likely to succeed.
The truth is that collecting on a court-ordered judgment is anything but easy. According to Salt Lake City-based Judgment Collectors, courts only decide cases and enter judgments against defendants. They almost never get involved in enforcement efforts except where debtors resist interrogatories. But even at that, court interference is minimal.
A Cat-and-Mouse Game
Companies that fail to collect on their judgments often do so because they go into it unprepared. They do not realize that they are playing a cat-and-mouse game with a debtor who has no intention of paying. And if you don’t know what game you’re playing, how can you compete effectively? You cannot.
There are those occasions when debtors cooperate freely. After losing a case, they voluntarily participate in interrogatories. They provide all necessary information, and they willingly work out a payment plan they can afford. But such scenarios are not universal. Plenty of debtors continue to resist paying even after a court-ordered judgment.
It is a Full-Time Job
Once a debtor makes the conscious decision to avoid paying, collecting on the debt becomes a full-time job. That means a company attempting to collect in-house needs to be prepared to let at least one employee devote all their attention to the case. Most companies cannot spare an employee for that purpose.
In most cases, judgment collection becomes a part-time endeavor. The team member assigned to the case puts effort into it only when they have extra time to do so. Months stretch into years until the judgment finally expires.
It should be noted that most states have a 7–10-year statute of limitations on judgments. Judgments can be renewed before they expire, but how many companies who have already failed to collect for a decade want to renew and start over?
Success Requires Resources
There is another thing to consider – collecting on judgments requires a certain amount of dedicated resources. Those resources are both material and non-material. The biggest material resource is the money necessary to cover legal costs. Those costs can really add up over time.
In terms of non-material resources, you are talking time right off the bat. In addition, you need access to public records, databases, and skip tracing tools. You need to be able to find debtors and any assets they may own. Gathering the information that you need is not easy even if you know how to do it. If you don’t know how, forget about it.
You Have to Know the Law
The proverbial icing on the cake is state law. Judgments are regulated differently in each of the states. In order to successfully collect and not violate the law, you need to know what the rules are. You need to know what you can and cannot do in a given situation.
Companies attempting to collect in-house likely do not have that knowledge. They either need to spend more money consulting with attorneys, attempt to figure things out on their own, or just do what they do and take their chances.
When it comes to collecting judgments, the system is stacked against creditors. But a professional judgment collection agency evens the playing field by bringing every resource to bear in tracking down debtors and getting them to pay.
