Courts enter judgments against debtors all the time. What courts don’t do is enforce the judgments they enter. Enforcement, or collection if you will, is still the responsibility of the creditor and its representatives. Collection is especially challenging when the creditor is self-employed. You can make the case that judgment collection is not a job well-suited to this type of individual.
This is not to say that a person cannot start their own judgment collection firm. Rather, the point is that self-employed people who do other things for a living should not be trying to collect on their own judgments. Collecting is an arduous process that can take a long time and require a significant investment.
● How It is Supposed to Work
Our system is set up in such a way as to require cooperation between creditor and debtor at the conclusion of civil litigation. When a court enters a judgment against a debtor, it is expected that the debtor will respond by paying what is owed. Debtors should also provide some information:
- Accurate contact information
- Employment information
- A list of assets, including bank accounts
- Any other relevant information.
This information should be provided as soon as possible following a court case. The same day would be ideal. Within a few days is expected. However, Salt Lake City’s Judgment Collectors says things rarely work this way.
● How Things Normally Work
Getting to the point of having to go to court usually means debtors are not cooperating. You may have a debtor who is months behind before going to collection. After collection fails, the creditor sues. This is how the debt ends up in court. The debtor’s lack of cooperation all along easily translates into less cooperation after the court case.
Debtors are known for doing all sorts of things, including:
- providing inaccurate contact information
- moving and not providing a new address
- not being forthright about employment
- attempting to hide assets.
A lack of cooperation inevitably means the creditor has to put time, money, and effort into tracking down the debtor and collecting payment. Things get more complicated when a debtor claims to have sufficient cash on hand to make payment. Asking for a payment plan is not abnormal, but will the debtor make good on that plan?
● Achieving Successful Resolution
Achieving successful resolution of a judgment is extremely difficult. It takes a lot of time and energy. If a debtor is especially adept at avoiding contact, collection can be nearly impossible. This is why it is a job not well-suited to self-employed individuals.
A self-employed contractor who paints houses is a perfect example. He has to keep his painting schedule full to make a decent living. He does not have time to spend on skip tracing. He doesn’t have the financial resources to take time off from work to put into skip tracing.
The other thing to remember is that he is an expert at painting. The tools of his trade are brushes, rollers, and sprayers. He has little to no knowledge about collecting on bad debts. Worse yet, he does not know his legal rights and responsibilities relating to judgment collection.
● Outsourcing the Job
Just like the self-employed painting contractor, just about any self-employed person would be better off outsourcing judgment collection to a specialized collection agency. Judgment Collectors is one such agency. There are others all around the country. They charge for their service, but it is worth it to a self-employed person who might not otherwise collect. Better to get a portion of what is owed than nothing at all.