Winning a civil judgment with some sort of monetary award makes a plaintiff a judgment creditor in the eyes of the law. As a creditor, the organization has the legal right to collect using whatever tools are legally available. A judgment creditor’s best bet is to hire a collection agency right away. Trying to collect in-house rarely ends well.
Judgment creditors are often companies that need to go after customers for not paying their bills. As such, that will be the premise for the remainder of this post. Note that everything you read applies to all sorts of judgment creditors. The information is not exclusive to companies going after deadbeat customers.
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3 Collection Options
Once a judgment has been entered against a debtor, the creditor has three options for collection. The first is to attempt collection in-house. A company might assign one or two members of the accounting department to handle it. Some companies have team members whose only responsibility is collecting bad debts.
The second option is to turn collection over to the company’s attorney. This is not a bad option as long as the attorney has the time and resources to pursue payment. Otherwise, sufficient attention may not be given to the matter.
The third option is to hire a collection agency. A company can turn to a general collection agency or a specialist agency that only handles judgments. Judgment Collectors is one such judgement collection agency. They have chosen to specialize in judgments exclusively.
The Right Choice Is Critical
All three collection options represent legitimate choices. There is a place for each one at the collection table. But companies should understand that the choices they make will be critical to their success. If a company chooses to hire a collection agency, that agency should be brought in right away. Waiting for a year before bringing in a collection agency only puts the agency behind in the game.
The reality is that some debtors are not willing to cooperate unless someone forces their hand. They do whatever they can to avoid payment. Judgment Collectors says that uncooperative debtors:
- are slow to respond to information inquiries
- are willing to give false employment and income information
- may move and not provide a forwarding address
- may attempt to hide assets that could be seized.
An uncooperative debtor willing to put forth the effort can make life miserable for creditors attempting to collect in-house. They don’t make things any easier on collection agencies, but at least the agencies know how the game is played. They have the skills, knowledge, and tools to fight back against debtors doing everything they can to skip out on what they owe.
Time Is of the Essence
Another important reason for hiring a collection agency right away is time being of the essence. There are two ways to look at this. First is the realization that time is a debtor’s ally. The longer it takes for a creditor to get its ducks in a row, the more time the debtor has to elude collection.
Second, civil judgments have statutes of limitations attached to them. The limit is 7-10 years in most states. If a creditor cannot manage to collect within that time frame, the judgment must either be renewed or left to expire. Getting a collection agency involved right from the start maximizes the limited amount of time there is to collect.
Judgment creditors have several options for collecting unpaid debts. When they choose to hire a collection agency, it is best to bring that agency in right from the start.
