The vast majority of judgments entered in U.S. courtrooms are never paid. Debtors and their lawyers find ways to avoid paying until creditors simply give up. And of course, companies not properly equipped to pursue outstanding judgments often don’t know where to start.
Does your company have outstanding debts it is wrestling with? If so, doing what you can to avoid court judgment and collection is a good idea. Why? Because a judgment is nothing more than a legal instrument that establish a creditor’s right to collect. They are not enforced by courts. Enforcement is left up to creditors and their attorneys.
So, how do you avoid the hassles of collecting outstanding judgments? By doing the following:
Work with Debtors
Financial health experts routinely encourage consumers to work with their creditors rather than falling behind on bills. In reality, it is a two-way street. Debtors are often afraid to contact creditors to ask for help. They are afraid their creditors will come down hard on them.
Your company can avoid a lot of trouble by showing a willingness to work with debtors as much as possible. Working on agreeable payment terms goes a long way to getting bad debts settled. Even accepting a lesser amount than you are actually owed could be beneficial in the long run. A percentage of a bad debt is better than nothing at all.
Work with a Collection Agency
If your efforts to work with debtors proves fruitless, the next step is to take those bad debts to a collection agency. For the record, this is a general collection agency or one that specializes in your particular industry. Collection agencies have a number of tools they can utilize.
Debt collectors can generally run credit checks, make phone calls, and send letters. However, they are prohibited by law from harassing debtors. They also cannot claim to have attorneys and staff if they do not. In short, collection agencies cannot threaten debtors.
Turn to the Courts
If all else fails, going to court may be your company’s only option. But that still doesn’t mean having to deal with the hassle of judgment collection. It is all in how you handle it. For starters, your company should hire an attorney that either specializes in judgments or at least has plenty of experience in the field.
Assuming you win your case, the defendant should voluntarily cooperate with your attorney to facilitate payment. In the absence of such cooperation, your company should not waste time or effort pursuing collection. Instead, it’s time to contact a judgment collection agency.
Judgment Collectors is a Salt Lake City is a collection agency that specializes in judgments. They work on a contingency basis, handling everything from start to finish. They bear all the expenses relating to investigation, research, communication, etc.
Judgments Are Limited
There are plenty of reasons to avoid reaching the final step of working with a judgment collection agency. Among them is the fact that judgments are limited. For example, judgments are good for an average of 7 to 10 years. States put limits on judgments so that debtors cannot be pursued indefinitely. That said, a creditor can always go back to court and have a judgment renewed at the end of its enforcement period.
Smart companies do their best to work with debtors to get unpaid bills settled. They do everything possible before turning to professional collection, attorneys, and courts. When court is the only remaining option, it is best to leave collection to an attorney or specialized debt collection agency. Handling things in house creates a lot of unnecessary hassle.
