You have won a civil judgment that includes a monetary award. Now it’s time to collect. Unfortunately, you are not confident that you will see every dime you are owed, if you see anything at all. What should you do?
Such scenarios are not all that uncommon. Collecting money judgments is not easy. Many times, judgment debtors are not as cooperative as they should be. Sometimes they really don’t have the financial resources to pay. Not being able to collect can be frustrating as a judgment creditor.
We do our best to encourage judgment creditors to not panic. We encourage them to develop a plan, execute that plan, and stick with it for as long as it takes. The starting point is understanding all the options.
Establish a Payment Plan
One of the easiest and most effective ways to collect when future prospects don’t look so bright is to work with the debtor to establish a payment plan. A typical payment plan has the debtor paying so much every month until the debt is paid off. If state law allows it, interest payments are generally added to the debt.
While it is true that agreeing to a payment plan could mean accepting payments over many years, a payment plan is still a safe way to ensure you get paid. It is better to get every dime over many years than nothing at all.
Negotiate a Settlement
You might not have time to wait for an installment plan to ramp up. If that’s the case, you have another option in a court-approved settlement. You can negotiate with the debtor to accept less than what is owed in exchange for an immediate lump-sum payment.
Reaching a settlement may not be the most attractive option because you are pretty much admitting you will not get everything you are owed. But just as with a payment plan, getting something out of a settlement might be better than risking getting nothing at all.
Bring in a Collection Agency
Your lack of confidence may not actually have anything to do with the debtor or his assets. It might be the fact that you really don’t know how to go about collecting. It is an unknown entity, and the unknown scares you. We get it. Judgment collection isn’t a walk in the park. But you don’t have to let your lack of knowledge get in the way.
Rather than attempting to collect on your own, consider bringing in a specialized collection agency like Judgment Collectors. An agency that works on nothing but judgments brings a certain amount of knowledge and experience to the table. We firmly believe that agencies like ours are the most qualified professionals to handle collection on behalf of judgment creditors.
Keep Tabs on the Debtor
It could be that your lack of confidence rests in the debtor’s limited income and resources. Maybe the debtor looks judgment proof right now. That doesn’t mean they will be judgment proof forever. So keep tabs on them.
Pay attention to what the debtor does and says. Use every resource at your disposal to keep track of their finances. In a few years, their circumstances might change. They might get a new job or come into some valuable assets. While you might not have an avenue for collecting today, an avenue could open down the road.
A lack of confidence in your ability to collect can be troubling. But all is not necessarily lost. If you would like help with collecting a judgment in any of the states we operate in, give us a call. Maybe we can help.