Money judgments are civil court cases resulting in a monetary award for one party or the other. Enforcing a money judgment means collecting the award plus interest and additional costs and fees. The big question for many judgment creditors is whether they should bring in a collection agency.
The judgment creditor is the party to whom the award is owed. Judgment creditors can attempt to collect on their own if they so choose. And in fact, many do. But that might not be the best course of action.
A Collection Agency’s Role
A collection agency is a firm specializing in collecting unpaid debts. Some firms, like Utah-based Judgment Collectors, specialize exclusively in money judgments. Judgments are the only type of debt they work on.
A collection agency’s role is pretty simple. The agency utilizes all the tools at its disposal to identify judgment debtors, locate their assets, and attempt to make contact for the purposes of working out a mutually acceptable plan for payment.
Why a Creditor Might Bring in an Agency
Judgment Collectors and its competitors do not work for free. Bringing in an agency automatically means spending more money. That is motivation enough for some judgment creditors to try to collect on their own. On the other hand, other judgment creditors immediately bring in professional help. Here are just some of the reasons they choose to do so:
1. Large Awards
Large awards can be more difficult to collect if a judgment debtor believes he holds a position of dominance over the creditor. Bringing in a collection agency more or less assigns collection to a third party. This third party will not be intimidated by a debtor who believes he has the upper hand.
2. Multiple Jurisdictions
Your typical money judgment case is a state case tried in a county court. Under normal circumstances, all collection efforts are confined to the county in which the lawsuit was filed. But what if a judgment debtor has assets in multiple counties?
In order for a creditor to pursue assets in multiple jurisdictions, the original judgment must be domesticated in all such jurisdictions. This adds a layer of complexity some creditors are not prepared to deal with.
3. A Disappearing Debtor
Bringing in a collection agency is a smart move when a judgment debtor falls off the radar. Disappearing debtors are not unusual. Nor is the practice of locating them through a strategy known as skip tracing.
Your typical judgment creditor knows nothing about skip tracing. Yet it’s old hat for judgment collection agencies. Not only are they familiar with skip tracing, but they also employ team members who specialize in it.
4. Extra Leverage
Yet another reason for bringing in a collection agency is gaining some extra leverage against the debtor. The unfortunate truth is that judgment debtors have a bad habit of not fully cooperating. Some refuse to participate in collection efforts at all. What is a creditor to do at that point?
Collection agencies equal leverage because they know how the system works. They know how to search for assets and find debtors trying to hide. They know all about tools like garnishment, judgment liens, and writs of execution.
A Creditor Is Going to Pay Anyway
Unless a judgment debtor writes a check as soon as the court case is over, the creditor is going to have to spend money on enforcement. That being the case, investing money in a collection agency could prove to be a better option. Bringing in a collection agency in the earliest possible stages increases the chances of getting paid in full.
