Collecting is the name of the game after winning a money judgment. But success is often fleeting. Debtors may lack the cash resources to pay upfront. They may not have any assets of value, assets that could be converted into cash to pay. And of course, some judgment debtors refuse to pay simply because they believe they can get away with it. Enter the judgment collection agency.
Judgment creditors can choose to try collecting on their own. They can also leave collection to their attorneys. But the third option, hiring an agency to handle collection, is the smartest move of all. If I were a judgment creditor, I would not think twice about bringing in a collection agency. I would bring the agency in on day one.
What a Collection Agency Does
In a general sense, a collection agency contacts debtors and makes arrangements for payment. But in a judgment collection scenario, things are a bit more complicated. That’s because a judgment is a court rendered decision. It is the civil court equivalent of a verdict in criminal court.
Winning a judgment establishes a legal debt and makes that debt an asset that can be bought and sold. It also gives a creditor access to collection tools that are not available without a judgment. The combination of these two things makes collecting judgments substantially different from standard debt collection.
Some debt collection agencies purchase judgments as assets. They tend to pay pennies on the dollar. Others, like Salt Lake City based Judgment Collectors, work on consignment. Rather than purchasing judgments, they supply a service for which they are paid. But they are only paid if they manage to collect.
Knowledge, Skill, And Tools
Any judgment creditor trying to collect on his own is in for a rough ride. Bringing in professional help just makes sense. Again, my preference is a specialized collection agency like Judgment Collectors. Collection agencies have three things that make them very appealing:
- Knowledge – A collection agency specializing in judgments has knowledge of the system that I do not possess. Agency team members are experts in this particular area of debt collection. Their knowledge could prove invaluable.
- Skill – Successfully locating judgment debtors and encouraging them to pay requires quite a bit of skill. It is a skill that I don’t possess. It is a skill that not all attorneys possess, either. But because collection agencies make their money by successfully collecting, they tend to hire people with the necessary skill.
- Tools – Collection agencies utilize a variety of tools for locating debtors and encouraging them to pay. Skip tracing is one such tool. It is a tool I don’t have access to and one that lawyers may not know how to utilize to maximum advantage.
Stepping back and looking at the big picture makes it clear that specialized collection agencies are in the best position to succeed in the judgment collection game. If you are not sure that this is true, compare it to something else – like auto repairs.
Trained and certified mechanics are in the best position to fix your car. Unless you are a repair expert by some chance, it’s best to leave complex repairs to an experienced mechanic. Why risk your car, and your bank account, by trying to fix it yourself?
It’s true that judgment creditors have options when it comes to collecting. For my money, a collection agency is a good value. I would rather pay them to collect for me than attempt to collect on my own. And if I am paying someone, I’d rather pay an experienced agency than an attorney.
