If there is one thing that we have learned over many years of collecting judgments, it is that every case is unique in some way. There are standard rules and procedures we can apply to every case, yet each case has its own peculiarities. Therefore, it is in everyone’s best interests to thoroughly assess a judgment before beginning enforcement efforts.
Below are six things worth thinking about before beginning enforcement actions. They will partly determine how you proceed, whether you choose to collect on your own, or you turn the judgment over to an attorney or collection agency. As a side note, Judgment Collectors is a specialized collection agency that focuses exclusively on judgments in multiple states, including Utah, California, and Arizona.
1. Available Assets
One of the first things we consider is what the debtor has available in terms of assets. This is important for the simple fact that there are some debtors who are essentially judgment proof. They do not have any valuable assets worth going after and their income is not sufficient to cover their debts. We need to know where we stand with each and every case we take. Therefore, an assessment of available assets is in order.
2. Jurisdictional Considerations
Next, it is important to look at any jurisdictional considerations. Another way to put it is to look at any idiosyncrasies in the law within the jurisdiction of the original judgment. Such idiosyncrasies are usually not a problem when a judgment is filed in the same county as the debtor’s assets. But if you are looking at different counties, there may be different jurisdictional issues to be aware of.
3. Likelihood of Future Challenges
Although it is extremely difficult to overturn a judgment in most states, that doesn’t stop debtors from trying. Therefore, it is important to consider the likelihood of any such attempts. Will the debtor try to appeal the judgment? Will there be an attempt to challenge the validity of the court’s ruling? Any attempt to appeal or challenge means more delays. It also means further legal action on the creditor’s part.
4. A Collection Timeline
Should a creditor choose to proceed after considering the first three issues, the fourth consideration is an actual timeline for collection. This timeline needs to be realistic. And unless a debtor is willing to pay up right away, it could take months or years to satisfy the debt in full. Collection timelines should reflect that reality.
5. Applicable Legal Issues
Above and beyond jurisdictional idiosyncrasies, there are always legal issues to think about. A prime example is the statute of limitations. The states have statutes of limitations ranging, on average, from 7 to 10 years. You must collect within that time frame or make a choice: let the judgment expire or renew it for another term.
6. Cost of Collecting
Last but not least is the cost of collecting the judgment. There will be expenses involved in tracking down assets, filing legal documents, etc. There is also the cost of labor. Time is money, as the saying goes. Needless to say that collection can get expensive as time goes on.
You might be interested to know that Judgment Collectors works on consignment. Once we take on a case, the creditor doesn’t pay another dime toward collection. We cover all our costs in full. And if we do not successfully collect, the client doesn’t pay. Our consignment model immediately ends the financial burden of collecting. We take the risk so that our clients do not have to. If you would like to learn more, feel free to contact us.