A number of years ago, the American Bar Association (ABA) published a post suggesting that an estimated 80% of all money judgments entered in the U.S. are never fully collected. There is ongoing debate over whether the number is actually that high. Yet it is generally accepted that most money judgments go unpaid to one extent or another.
If you are a judgment creditor just beginning the journey toward full payment, do not be one of the many who never get paid. You actually have more control over your circumstances than you might think. You also have a number of options.
Is the Debtor Judgment-Proof?
The very first thing you should do, before you attempt any collection efforts, is determine whether the debtor is judgment-proof. A judgment-proof debtor is a debtor who:
- Doesn’t have enough income to garnish.
- Doesn’t have cash assets to garnish.
- Lacks property on which judgment liens can be filed.
- Lacks non-exempt property subject to writs of execution.
- Has no reasonable prospects for improving his situation in the near future.
A judgment-proof debtor is extremely difficult to collect from. But this does not mean you do not try. At the very least, you might be able to convince the debtor to agree to a monthly payment plan. A little bit of money each month is better than nothing at all, even if it takes years to pay off the debt.
In the absence of a payment plan, don’t simply throw up your arms and walk away. Run regular searches on property records, credit reports, etc. After all, a judgment-proof debtor may not remain so permanently. Things change. Circumstances improve. If the debtor has means to pay you five years from now, you can always begin collection efforts at that point.
Leave Collection to Professionals
One of the big takeaways from the ABA article was that judgment creditors often fail to collect because they do not know how to go about it. I am in that camp. If I were ever on the winning end of a civil court case, I would immediately bring in professionals to handle collection for me.
Judgment Collectors is a Salt Lake City, UT agency specializing exclusively in collecting judgments. They are experts at what they do. They are far more qualified to pursue debtors and collect from them than I am. To me, their services are worth paying for.
A judgment creditor could also entrust collection to his attorney. It’s not the best option in my opinion, but it is still better than trying to collect in-house. At least attorneys know the law and understand the system.
Whatever You Do, Don’t Delay
The biggest concern in all of this is time. Know this: time is your enemy in the judgment collection game. The more time it takes to collect, the less likely you will get every penny you are due. So do not delay. Begin collection efforts as soon as legally possible.
Note that some states force judgment creditors to wait a certain amount of time before beginning collection. Utah is a good example. The Beehive State automatically imposes a 28-day stay in order to give judgment debtors a chance to appeal. But once the stay has expired, it is time to get to work. Every day you wait works in favor of the debtor.
Even though the majority of money judgments are never collected, creditors don’t have to settle for eating their losses. A proactive approach increases the chances of getting paid. And when a creditor brings in professionals, those chances go up even further.
