Business News

Should You Try to Collect a Money Judgment on Your Own?

Salt Lake City's Judgment Collectors

You have won a lawsuit and monetary award in civil court. Now what? Maybe you are a small business owner trying to collect from a deadbeat customer. Perhaps you are a landlord attempting to collect back rent following an eviction. Regardless of your particular circumstances, should you attempt to collect on your own? Probably not.

It is commonly known that up to 80% of all money judgments are never collected. This is a stunning statistic. Having just won a money judgment yourself, you only stand a 20% chance of actually collecting – at least if you go it alone. Bring in professional help and your odds go up substantially.

A Lawyer or Collection Agency

Your options for bringing in professionals boil down to two: a lawyer or a specialized collection agency. Most small businesses will turn collection over to their attorneys. It is better than collecting in-house, but there is a big disadvantage to going with an attorney.

Few attorneys specialize in judgment collection. There is not enough money in it for them. Therefore, they have other things to do. An attorney will not give collection his full attention or top billing on the priority list. So the better option is a specialized judgment collection agency.

Salt Lake City’s Judgment Collectors is one such agency. They specialize in judgments and judgments alone. Collecting outstanding judgments in eleven states is all they do. They say there are very valid reasons to bring in a collection agency from day one.

Collecting Can Be Challenging

Judgment Collectors explains that collecting can be challenging. Right off the top is the fact that judgment debtors are not always as cooperative as they should be. They often don’t provide complete and accurate information. Sometimes they try to hide assets. Some debtors even pack up and move without providing forwarding information.

Also consider the following:

  • Time – Pursuing an uncooperative debtor almost always requires an investment of time. It can take years to collect from a person who is pulling out all the stops to avoid paying.
  • Knowledge – Collecting judgments is governed by state rules and regulations. Judgment creditors need to play by them. Otherwise, a creditor could find himself in trouble with the law.
  • Tools – Judgment creditors have access to certain tools afforded by the court. But knowing how to use those tools is the key to leveraging them effectively. Not knowing how to use them increases the likelihood of failure.

A collection agency put all its efforts into getting paid. Staff are fully knowledgeable as well as efficient with the tools at their disposal. Why any judgment creditor would turn a blind eye to collection agencies is mystifying.

Paying for Services

I suspect that many judgment creditors attempt to collect in-house because they don’t want to pay for collection services. It is reasonable, albeit still not wise. But that aside, paying for services generally falls under one of three categories: hourly fee, sale, or consignment.

The hourly fee model applies mainly to attorney services. As far as collection agencies are concerned, some actually buy judgments as tangible assets. You sell your judgment for pennies on the dollar and leave it at that.

A collection agency working on consignment is similar to a personal injury attorney who doesn’t get paid unless he wins. Under the consignment model, the collection agency takes a portion of whatever is collected. But if the agency fails to collect, it doesn’t get paid.

If you are facing the prospect of collecting a civil judgment, don’t go it alone. It is wiser to bring in professional help, even though doing so costs something.