It has been our experience that a lot of judgment creditors really don’t want to continue pursuing legal remedies to get paid what they rightly owed. They have had enough of civil court and all that comes with it. They would rather negotiate with their debtors to reach some sort of settlement.
Negotiating an amicable arrangement is a legitimate option. It is especially attractive when a judgment creditor is not interested in investing many years and significant amounts of money in collection. But there is a trick to it all. Working with a Utah collection agency can help creditors be more creative and ensure negotiations result in maximum financial benefit.
To that end, here are five proven negotiation strategies for post-judgment settlements:
1. Search for Assets Ahead of Time
Whether a creditor is looking to settle or is interested in pursuing further legal action, searching for assets is always a wise strategy. It can be helpful at the negotiating table. How so? By giving the creditor a bit of leverage.
A creditor who knows about the debtor’s income and assets also knows that he may have other avenues to pursue if negotiations break down. But there is something else to consider. If a debtor knows that his income and assets have been discovered, he has more reason to reach an amicable settlement.
2. Propose a Structured Payment Plan
A creditor uninterested in further legal action is probably negotiating with a debtor who feels the same way. But debtors naturally want to look out for their own interests. How can the two meet in the middle when their interests are competing?
A creative way to find common ground is for the creditor to offer a structured payment plan. A creditor should start with a proposal that primarily benefits his side of things, knowing that some amount of negotiation will take place. It is like selling a house. You start the listing price at the high end knowing you might have to drop it to seal the deal.
3. Propose a Lesser Amount
Another creative way to meet in the middle is to propose a lesser amount. The creditor agrees to accept less than what is owed in exchange for immediate payment. On the debtor’s side, he can get the matter settled quickly while saving a little money. The combination of a lesser amount and a lump sum payment can be a win-win.
4. Engage Early and Frequently
We have seen so many cases in which a lack of communication between parties led to assumptions, misunderstandings, and a lack of trust. We recommend just the opposite. Creditors should engage early and frequently. They should also keep the lines of communication open. Offering as many communication options as possible can also help keep things on track.
5. Keep Things Professional and Polite
It is natural for judgment debtors to expect a certain amount of aggression from their creditors. Yet any amount of aggression puts a debtor on the defensive, and that could limit his flexibility in negotiations. It is far better to communicate in a way that encourages a positive response.
Creditors should keep things professional and polite. A bit of lightheartedness might even be appropriate here and there. The right attitude will simultaneously keep the debtor guessing and encourage him to negotiate in good faith. On the other hand, aggression will simply force him into a corner.
Negotiating some sort of post-judgment settlement is fairly common. But to negotiate successfully, creditors need to be creative. They also need to know with whom they are dealing. Get it right, and a creditor can walk away very satisfied.