The minute a judgment is entered against a debtor, the collection clock starts ticking. Time immediately becomes the biggest concern. In fact, you might consider time the biggest enemy of successful judgment collection. The longer a judgment goes unpaid, the less likely it will ever be paid.
Judgment Collectors, a Salt Lake City collection agency that specializes in judgments, explains that judgments are enforceable for up to 10 years in most states. Getting a judgment renewed for another 10 years requires going back to court. As a creditor, your chances of getting paid a pretty slim if you have to renew a judgment.
Time has a way of making it harder to collect. It all boils down to debtors and their active efforts to avoid paying. Needless to say, debtors are not dumb. They are smart enough to avoid the initial payment resulting in the judgment. They are also smart enough to continue resisting.
How Judgments Are Enforced
To understand why time is the enemy, you have to understand how judgments are enforced. Judgment creditors have a number of enforcement tools at the disposal. Though these vary by state, the most common tools are:
- voluntary payment plans
- wage garnishments
- judgment liens
- writs of execution (asset seizure)
- bank account seizure.
Every enforcement avenue is subject to normal life changes. A debtor whose wages are garnished may lose his job. If he keeps his job but his salary does not keep pace with inflation, there may come a point at which he doesn’t have enough disposable income to garnish.
Let us say a creditor seeks to exercise judgment liens. The debtor can stall long enough to transfer a piece of real property to someone else. He could sell his vacation home to a child at a nominal price, for example, completing the transaction in under a week.
The point is that things change over time. The enforcement avenues available immediately after a judgment is entered are subject to change over time. The more time that passes, the more likely those avenues will change.
Debtors Work the System
The unfortunate thing for judgment creditors is that smart debtors know how to work the system. And they do it well. For some, working the system is almost a full-time job. They move assets around. They secretly dispose of real property. They change addresses and jobs. With every change in their circumstances, the collection trail grows colder.
On the other hand, professional judgment collection firms know how to work the system too. The best in the business are staffed by an army of investigators, attorneys, and forensic researchers. They leave no stone unturned in tracking down debtors and making them pay. Yet they are always cognizant of the ticking clock.
Collecting Before Renewal Is Required
The goal of every judgment creditor, attorney, and professional collection agency is to collect on a judgment before renewal is required. A judgment that goes 10 years without being collected is one that likely will not be collected at all. Simply put, you just do not want to reach the 10-year mark.
To some extent, collecting on a judgment is like solving a crime. Police investigators know they have to have some solid leads within the first 48 hours of a new investigation. If they do not turn up anything within that time, the chances of solving the crime go way down. Judgment collectors are up against a similar situation.
Time is of the essence when you are collecting a judgment. The longer a judgment goes unpaid, the harder it is to collect.