It is fair to say that the modern world runs on data. And data is information, right? Absolutely. Moreover, information is as crucial to collecting judgments as any other business endeavor. Creditors need as much information as possible so as to properly inform their decisions.
Also note that accuracy is non-negotiable. A creditor working with inaccurate information is no better off than a counterpart with no information at all. The success of any collection effort lies in the accuracy and quality of the information creditors glean.
Employment Information
Information gathering begins in the earliest stages of judgment collection. Even in cases in which creditors must wait a certain amount of time for potential appeals before contacting a debtor for payment, information gathering can begin. The place to start is employment information.
Creditors should seek to find out where their debtors work, how much they get paid, and paycheck frequency. Employment information is the bare minimum. Hopefully, the judgment debtor provides the information willingly and truthfully.
Banking Information
Banking information is valuable in that it helps complete the picture of a debtor’s current financial situation. In some states, bank accounts can be garnished just like wages. When bank account management is appropriate, creditors want information about all a debtor’s accounts – including current balances and account numbers.
Information on All Assets
The most important type of information a creditor could glean pertains to the rest of a debtor’s assets. Income and bank accounts are just the starting point. Creditors want to know about things like real property, cars, boats and RVs, jewelry and collectibles, securities, and so on.
All such assets could be leveraged to get a judgment paid off as quickly as possible. However, there is one caveat: state laws regarding exempt property. Exempt property is properly not subject to writs of execution for payment. States classify exempt and nonexempt property differently, so it is important to know and understand the rules on a state-by-state basis.
How Information Is Obtained
Another thing that differs from one state to the next is how information is obtained. Ideally, it would be nice if judgment debtors came to court with information already in hand. They would meet briefly with their creditors’ attorneys after the court hearing and willingly divulge all of it. But things almost never work out that way.
Creditors normally need to rely on one or more tools to obtain the information they want. Here are just a few examples:
- Interrogatories – Interrogatories are basically written questions submitted to debtors through their attorneys. Debtors are expected to answer truthfully and in a timely manner.
- Debtor’s Exam – A debtor’s exam is a court hearing during which attorneys for the creditor are allowed to ask pertinent questions. The debtor is compelled to answer truthfully.
- Records Searches – It is not unusual for interrogatories and debtor’s exams to yield limited results. If creditors want to know more, they need to dig deeper. Records searches are one option for doing so.
You now know the basics of what creditors need to know before collecting, and why. The need for information boils down to the fact that it provides the foundation for moving forward. Creditors need to fully understand their debtors’ financial positions in order to make sound collection decisions.
Have you been struggling to collect an outstanding judgment? So, Judgment Collectors may be able to help. Let us take a look at your case and see what we can do. We work on consignment, so you have nothing to lose by contacting us. On the other hand, you have a lot to gain.