It is no secret that the vast majority of court judgments go uncollected. In fact, an April 2020 post from the ABA Journal estimates that 80% of all judgments are never ultimately satisfied. There are lots of reasons explaining why this might be so. But in the end, it often boils down to how creditors go about their collection efforts.
Obtaining a judgment against a debtor never guarantees payment. All it does is officially recognize the debt in question and grant access to certain tools and methodologies that creditors can utilize to their advantage. But when all is said and done, actual collection is left up to the creditor and its authorized representatives. Courts rarely intervene to enforce judgments.
So, is there anything you can do to increase the chances of successful collection? Absolutely. Below are a few suggestions compliments of Salt Lake City’s Judgment Collectors, a collection firm that specializes in judgments across six states.
1. Obtain Lien Rights
The first and most important thing you can do is obtain lien rights. In legalese, this is known as ‘perfecting’ your lien rights. In essence, you or your attorney enter the judgment with the local recorder’s office in order to establish an official record of the court’s decision. Once recorded, you can prevent sale of the creditor’s property until the judgment is satisfied. As an added bonus, obtaining lien rights gives you a bit of leverage should the debtor declare bankruptcy.
2. Offer a Payment Plan
Have you ever heard the idiom that says you can catch more flies with honey than vinegar? It applies very well in the arena of judgment collection. You are more likely to encourage the debtor’s cooperation if you offer a payment plan rather than demanding full payment up front. If it doesn’t work, there are other avenues you can pursue. At least you tried to make things easier on the debtor.
3. Verify Income and Assets
As soon as the debtor provides a list of income and assets, verify every item on that list. Do not wait. If you can verify the same day, all the better. The point is to fully understand exactly what the debtor has in relation to their ability to pay. Immediate verification will tell you whether the debtor is being upfront with you.
Along the same lines, do not ignore deadlines. If your attorney gives the debtor 30 days to supply a list of income and assets, don’t wait until day 45 to find out why the debtor has delayed. Every decision to ignore a deadline just further encourages the debtor to avoid payment.
4. Bring in a Professional
Winning a judgment does not mean you have to handle collection on your own. Many companies try to manage collection in-house only to realize they cannot. You can avoid a similar failure by bringing in a professional right away. That professional may be in the form of an attorney or a specialized judgment collection firm.
Unless attorneys focus solely on judgment collection, they may not be the best choice. On the other hand, a specialized collection firm that does nothing but judgments will have the knowledge, experience, and resources to get the job done. You are more likely to succeed by bringing in such a firm.
It is unfortunate that so many judgments go uncollected. It is equally unfortunate that failure to collect is almost always the result of poor collection efforts. Bring your collection efforts up to snuff and the chances of successfully collecting go way up. That is really the whole thing in a nutshell.