Posts Tagged ‘Collections’

Get Set Go With Your Judgment Collections

June 5th, 2021

US Court System provides a great service to the community by trying to resolve disputes for a very nominal fee. Once the judgment is declared, judgment creditors have multiple options before them.

One needs to be aware of stringent debtor protection laws protecting the debtors. Before one makes an attempt to collect a judgment, a detailed study of the debtor protection laws is recommended. This will ensure the creditors’ collection efforts are within the acceptable norms of the law. This is knowledge is key to success in judgment collections effort.

As 80-85% of the judgments are not collected or not collected in time as court systems cannot make debtors pay. Judgment collection can be a challenge especially when the collectors are not experienced in judgment collection and has regular job to keep them busy.

Some of the options for the judgment creditor has are

Judgment Creditor can contact the collection agency to assign the collection responsibility. Most collection agencies do not charge upfront fee but work on contingency model. No collection No Fee. Collection fee charged by the collection agencies usually ranges between 33% to 50% of amount collected. If one is not aware of the collection process and/ or does not have time to collect for oneself, one can consider assigning the judgment to a collection agency. Major challenge is to find a professional and effective collection agency so that time and energy is not wasted. One can search the internet to find judgment collection agencies in once county. Talk to hand few of judgment collectors and pick the one based on fee charged, experience and previous success rates.

Second option is to identify trained judgment recovery professionals. As these professionals manage a relatively small portfolios, their focus on each and every recovery account would be high. This is critical for ensuring collection in time. Judgment recovery professional charge in the range of 33% to 50% on contingency basis like the collection agencies do. Major advantage being attention given to each and every case, the key differentiator in collection business. The percentage fee that a judgment recovery specialist charges is probably more than a collection agency. That is because they do more, in my view. They also handle all additional court costs and sheriff costs. It is not unusual for a judgment recovery person to receive 50% of the judgment money. But 50% of something is better than 100% of nothing. One can follow the same process in the selection of judgment recovery professional as explained earlier. Preferably select the one who is close by.

Third option is to collect judgment oneself. This option is not a bad option provided one has knowledge and time to collect. With persistent effort, and trial and error approach, I am sure one can collect the judgment amount. If one has decided to collect oneself it is recommend to get familiarized with court procedures and collection methods before starting the collection process.