Judgment Collectors and Collection Agencies: The Differences

Judgment Collectors is a firm that specializes in collecting unpaid court judgments. You could make the case that we are a collection agency of sorts. However, there are some key differences between general debt collection and judgment collection. As such, collection agencies that market themselves as judgment collectors go above and beyond general debt collection.

If this all sounds confusing, don’t worry. It is not unusual for new clients to not fully understand how judgment collection works when first contacting us. They don’t fully understand that specializing in judgment collection requires us to do things a bit differently.

Judgment Collectors and Collection Agencies: The Differences

General Collection Agencies

A general collection agency in most states is able to work on behalf of clients to collect just about any type of debt. A utility company can hire a collection agency to pursue unpaid bills. So can a cell phone provider, a local hotel, a medical office, etc. Collection agencies have a limited amount of legal authority to pursue debts on behalf of their clients.

Generally speaking, collection agencies get paid by withholding a certain amount of what is collected for themselves. This is usually a percentage. However, there are cases in which collection agencies outright purchase debt from their client. They buy it for less than its face value, relying on the difference to act as their payment.

Judgment Collection Is More Specific

A judgment collector focuses on a more specific type of debt. It is in the name: judgment. For example, our agency focuses exclusively on judgments in six states: Arizona, California, Idaho, Texas, Utah, and Washington. We don’t collect on general debts; we work exclusively on unpaid judgments.

What is it judgment? It is a court-ordered payment resulting from civil litigation. For instance, a creditor may sue a debtor over outstanding invoices. A win by the creditor results in the court entering a judgment in their favor. A typical judgment amount would cover the unpaid invoices plus any additional expenses the creditor incurs through collection.

In another case, one entity may sue another for pretty much any reason. Victory by the plaintiff would result in a judgment issued in their favor and against the defendant. Maybe it’s two roommates fighting over unpaid rent. Perhaps it’s a party rental company suing a customer over damaged equipment.

Additional Collection Tools

The biggest difference between a judgment and general debt collection is found in the tools we have to pursue debtors. Once a judgment has been entered against a debtor, the debt itself has been elevated. We can now use certain tools that general collection agencies cannot. Wage and bank account garnishment are two examples.

Most states allow wage garnishment to a certain degree. The laws vary from one state to the next, but it is fairly common to garnish wages to settle a judgment. Bank account garnishment is less common, but it’s also available in many states. Without a legal judgment in place however, neither wage nor bank account garnishment is possible. It is the judgment that creates the authority to garnish.

No Risk Judgment Collection

We want to close by explaining how Judgment Collectors gets paid. We operate on a contingency basis. That is to say that our clients do not pay anything up front. We cover all the costs of debt collection ourselves. If and when we collect, you pay us for our work.

We prefer the contingency model because it protects our clients. We suspect our clients like it too. Either way, Judgment Collectors is not a general debt collection agency. We focus exclusively on unpaid judgments in the six states we serve.