A judgment is a court order recognizing the legitimacy of a debt and compelling the debtor to pay. Unfortunately, obtaining a judgment is often easier than actually collecting the money. That’s why so many judgment creditors turn to collection agencies like Judgment Collectors in the weeks and months following successful litigation. They rely on us to choose the best collection options and then put them in play.
What are those collection options? That depends on the state in which the judgment was entered. States govern judgments differently, so what might be allowed in Utah could be off the table in another state.
There is no way for us to tell you every option available in every state in which we operate. But we can offer some general guidelines. Here are four of the most common collection options creditors and their representatives have access to:
Although the lump sum payment is arguably the rarest of all collection options, it is exercised every now and again. The judgment debtor writes a check for the total amount owed within a few weeks or months of the judgment being entered. Would it be that all judgment cases ended so easily and amicably?
As a judgment creditor, there is a way you could encourage the debtor to make a lump sum payment: agree to accept less than what the person owes you. Perhaps you are willing to offer a 25% discount if the debtor pays the rest in full. Knowing what judgment collection can cost in terms of time and financial resources, it might be better to accept a discounted payment and put the matter to rest.
When a lump sum payment is impossible, judgment creditors are often willing to work out some sort of monthly payment plan. This allows the debtor to pay off the debt in installments, thereby halting any further collection efforts as long as monthly payments are made.
Once again, creditors can agree to reduce the total amount due in exchange for monthly installments. Debt reduction is not required, though. Under the law, a judgment allows the creditor to collect the full amount along with attorney’s fees, court costs, and perhaps even interest.
Many states allow the practice of garnishment in order to satisfy outstanding judgments. What is garnishment? The city of Murray, UT explains it this way: garnishment is “to intercept money owed by the debtor to someone else.”
There are two types of garnishments. The first is wage garnishment. This is a situation in which a garnishment order compels an employer to deduct a certain amount from the debtor’s paycheck and forward it to either the creditor or its representative.
The second type of garnishment involves bank accounts. Some states allow garnishment orders that compel banks and credit unions to deduct a certain amount of money from a debtor’s account and forward it to the creditor.
Perhaps the most drastic collection option is known as the Writ of Execution. This is a court order that allows the local sheriff or constable to seize and sell nonexempt property. One example of a nonexempt property would be a vacation home near any one of Utah’s ski resorts. Because the vacation home is not the debtor’s primary residence, it is on the table as a collection tool.
As a judgment collection agency, part of our job is to figure out the best collection tools and then utilize them to the client’s advantage. If you need help with an outstanding judgment, feel free to contact us.
Published October 31, 2023