As a judgment collection agency active in multiple states, we have had the privilege of interacting with self-employed people in Utah, California, Arizona, and several other states. These are generally good people who sincerely just want to get paid and get on with their lives. We are happy to help. This leads us to a question we hear quite often: should self-employed creditors outsource judgment collection or handle it on their own?
By their nature, the self-employed tend to be a resilient bunch. They tend to be self-reliant in nearly every aspect of life and business. So it wouldn’t be surprising for a self-employed person to win judgment and then attempt to collect it in-house.
Here is why this is usually not a good idea:
Only in very rare instances are debtors fully cooperative with creditors. It happens, but it is not the norm. The reality is that collecting is a time-consuming process that, at least initially, is subject to a legally established schedule. Self-employed people have enough to do just running their businesses. They do not have extra time to put into chasing down debtors and collecting payments.
The time issue takes on greater urgency when a judgment nears the end of its statute of limitations. Note that states allow enforcement for, on average, a period of seven to ten years. That may seem like a long time, but it is not in the judgment collection game. Seven years go by very quickly. If you are not paying attention, your judgment could expire without you even knowing it.
Because time and effort need to be put into judgment collection, money must be spent. If a self-employed business owner decides to collect in-house, they bear the expense of every action taken. It could add up to quite a bit of money over time. Outsourcing collection to a third-party collection agency changes that.
When creditors turn their judgments over to us, we immediately incur all expenses moving forward. The client never spends another dime. For a self-employed person who needs to be meticulous about cash flow, not having to spend any more money is a huge bonus.
Many of the debtors we track down are particularly good at hiding their assets. It becomes a cat and mouse game that often requires a ton of research to win. We cannot speak for other collection agencies, but we can say that Judgment Collectors excels at research and investigation. We are exceptionally good at finding assets that debtors work hard to conceal.
We would not expect a self-employed creditor to know how to research the way we do. We wouldn’t expect any client to have access to the same resources. The bottom line is that judgment collection is a highly specialized line of work that involves looking around corners and turning over stones. If you don’t know how to research, you are at a serious disadvantage.
Finally, we say over and over again that the vast majority of judgments entered in the U.S. every year are ultimately never paid. For self-employed contractor who works hard for their money, this is not acceptable. But if that contractor tries to collect in-house, the chances of failure are pretty high. That’s not the case when they outsource to a judgment collection professional. We get results.
The self-employed are just as likely as any other business to find themselves in a collection situation. We advise them to not try to collect judgments on their own. Leave it to a judgment collection professional. Please contact us with your judgment and see what we can do.
Published July 26, 2022