Imagine you are a small business owner in Salt Lake City, Utah. You have gone to court in hopes of collecting from a customer who has failed to pay his bill for an extended amount of time. You succeed in having a judgment entered against that customer. But five years later, you are still waiting to be paid. What do you do? You contact Judgment Collectors, a local collection agency that specializes in judgments.
Judgment Collectors is just one of hundreds of similar businesses across the country. Such firms exist because judgment collection is big business in this country. Mind you, these firms specialize in judgments. They are not general debt collection agencies willing to take on any and all debts. Court-entered judgments are their specialty.
1.Most Judgments Go Unpaid
Judgment collection is big business in this country for one simple reason: some 80% of all judgments go unpaid. In other words, creditors go to all the trouble and expense of civil litigation only to wind up never receiving a dime for it. That is an astounding number by any measure. What does that have to do with collecting judgments as a business?
Judgments go unpaid because creditors lack the time, resources, and skills to enforce them. Remember that a court entered judgment is little more than an official record of an existing debt. Courts rarely enforce judgments except under extreme circumstances. In most cases, enforcement is left to creditors.
Your average small business owner has no idea how to enforce a judgment. They might go to their attorney for help. And while that attorney may know more than the small business owner, they may not have the knowledge to effectively pursue collection either. That puts firms like Judgment Collectors in the driver’s seat.
2.The Judgment Experts
Firms that specialize in pursuing unpaid judgments are the experts. They know the system inside and out. They know how state laws apply to every case they work on. Most importantly, they have the time, tools, and resources to get the job done.
An experienced judgment collector relies heavily on research and investigation. But more than that, investigators must do their research without tipping off debtors. This is one area in which creditors and attorneys often make mistakes that come back to haunt them.
Consider the post-judgment deposition. Immediately following the entry of the judgment, attorneys seek to interview debtors to discover their employment, their assets, etc. Yet the questions being asked tell debtors exactly where attorneys are going with their cases. Smart debtors can leave the courthouse and immediately start working to hide assets or move them around.
A judgment collection agency with skilled investigators knows how to find assets, employment information, and other important data without tipping off debtors. They know how to find assets that have purposely been hidden.
3.Getting in Over Their Heads
Collecting on judgments is big business because creditors often get in over their heads. This is why so many judgments go unpaid forever. Debtors smart enough to avoid paying long enough to have a judgment entered against them are also smart enough to continue avoiding creditors and their attorneys. But few of them are smart enough to evade professional debt collectors with the right tools at their disposal.
The fact that 80% of judgments still go unpaid is evidence of how necessary expert judgment collecting services are. So many unresolved cases also suggest that there is plenty of room for more collection agencies to get involved. If you have been looking to start your own business, judgment collection is not a bad option.