Strategies for Minimizing and Avoiding Judgments

Having to go to court is no fun. As a business owner or manager, civil litigation is not on your list of things to do. You would rather concentrate your company’s efforts on serving your customers. Things don’t always work out that way, though.  No matter how hard you try actively avoiding judgments, sometimes court is the only option for resolving disputes. Sometimes court-ordered judgments are the only way to get debtors to pay.

We have worked on enough judgments to know that they are often more hassle than they are worth. But there are times when seeking a judgment cannot be avoided. Fortunately, those times are the exception to the rule. Furthermore, there are strategies that companies can employ to minimize or completely avoid having to go the judgment route.

Establish Concrete Terms

Court judgments fall into one of two categories: unpaid debts and disputes with other parties. Judgments entered as a result of unpaid debts can pertain to individuals, businesses, and even nonprofit organizations.

One of the easiest things a company can do to avoid these types of judgments is establishing concrete terms. Doing so eliminates the open-ended invoice. It eliminates the customer’s ability to ignorantly avoid paying the bill.

Your company should decide on terms that are best for cash flow. If you cannot afford to wait 30 days for payment, make your term shorter. Also, be sure to clearly indicate terms on all invoices and monthly statements. Terms should be both conspicuous and easy to understand.

Don’t Let Collections Go

Hand-in hand with establishing concrete terms is sticking to them. As soon as a company or individual is late, you get on it. Letting things go gives debtors permission to wait a little longer to pay. And if a company does that too often with too many customers, cash flow eventually becomes a problem.

If your company’s terms are 10 days, someone in the billing department should be making contact on day 11. This doesn’t necessarily mean calling and demanding immediate payment. Sometimes a general email reminder gets the job done. The point is that you want tardy customers to know that you are paying attention and that you expect to be paid.

Maintain Good Relationships

In terms of judgments that arise out of disputes with other companies, avoiding judgments may be a bit more difficult. One strategy every company could adopt is maintaining solid relationships with other business partners. Those relationships should be cultivated from the very start.

Strong business relationships are a lot like strong personal relationships. They are built on trust and mutual understanding. When companies foster those types of relationships between them, they reduce the chances of disputes that eventually could lead to civil litigation.

Try to Work Things Out

There are always those judgments that, from the outside looking in, seem to arise from petty disputes that could have otherwise been worked out. In some cases, business owners did try to work things out with the other party. But in other cases, they did not. Needless to say, companies should do their best to work out their differences so as to avoid court altogether. The reality is that no one really wins in court.

The world is imperfect. And because of that, Judgment Collectors will always have judgments to work on. When avoiding judgments, or at least minimizing their frequency, your company could find success employing the strategies offered in this post. In the event you do find yourself on the winning side of a judgment, contact us right away. Let us get to work on your case so that you don’t have to spend a dime or a minute doing it yourself.