Winning a monetary award in a civil court case is the start of what is often a long and arduous process of debt collection. It is not unusual for judgment creditors (the winning parties) to attempt to collect on their own. We would never begrudge someone for doing so. But we do think it is important that judgment creditors understand that collection isn’t free.
This is worth mentioning, given the fact that creditors may decide to handle collection in-house so that they don’t have to pay an attorney or a judgment collection agency. We get it. Paying the extra fees just seems foolish if you can handle collection on your own. But there are still costs associated with in-house debt collection. No one does it for free.
Your Time Is Worth Money
Time is the enemy of successful judgment collection. So in terms of what in-house collection costs, it is appropriate to start with the time element. Your time is worth money.
If you are an individual or sole proprietor, you spend time earning a living. Every hour you work equals money in your pocket. What if you spend some of that time chasing an unpaid judgment? Now you are not working and not getting paid. Every hour you put into collection translates into less money earned from your normal employment.
Maybe you’re a business owner. You are going to assign judgment collection to someone in the accounting department. Every hour that person spends on collection efforts is an hour not spent doing normally assigned work. Now it is costing you double. You’re paying that employee to work on collection but losing money on routine work that isn’t being done.
Debt Collection Efforts Have a Direct Cost
Although time is the biggest challenge in judgment collection, there are also direct costs involved. Let’s say a judgment creditor needs to go back to court for a garnishment order or a writ of execution. That means more court documents to file. It could also mean more hearings. There are court fees and other costs associated with these things.
A creditor relying on an attorney to handle things has attorney’s fees to pay on top of filing fees, court costs, etc. So, if a judgment debtor does not agree to a payment plan upfront, the creditor is likely to spend more money on future court proceedings.
There is also the matter of investigating the debtor and his assets. Yes, there are publicly available resources that can be accessed without spending a dime. But if those resources failed to provide enough information, it is entirely possible that a creditor will have to invest in proprietary databases. Those cost money.
Skip Tracing May Be Necessary
In a worst-case scenario, a debtor would attempt to disappear. He would move across the county, across the state, or even out-of-state altogether. Collection now becomes a matter of finding the debtor. Private detectives, attorneys, and others would search for the debtor with a set of tools collectively known as ‘skip tracing’. But if you need to hire somebody to do skip tracing for you, that is more money spent.
Judgment Collectors is a debt collection agency that specializes in pursuing and collecting unpaid judgments. Our services are not free. However, we do work on consignment. That means you only pay if we manage to collect. We cover all our own costs along the way. So if we cannot collect, you pay nothing at all.
Remember that collection isn’t free. So it’s really a matter of who and how you pay to collect. We think your best bet is to hire a judgment collection agency.