Monetary judgments are entered in civil courts around the country every single day. Have you ever wondered how many of those judgments are successfully collected? If so, you might be surprised by the answer. Without giving you the number just yet, it is not very high. The vast majority are never collected.
The most recent number we have is about 20%. Let that sink in. If only 20% of civil judgments are ever collected, that means 80% go uncollected. One out of every four judgments ends up being little more than ink on a piece of paper. A lack of collection means a judgment has not been enforced. And if it is not enforced, what’s the point?
Collection Is the Creditor’s Problem
You might wonder why an organization would go to the trouble of filing a civil lawsuit only to not follow through on collection. It is not that creditors have no intention to collect. It’s not even that they don’t want to collect. More often than not, creditors try to collect but fail.
At the root of the problem is that courts do not get involved with collection. According to judgment collection specialists Judgment Collectors, courts view the collection as the creditor’s problem. The court’s only responsibility is to determine liability and render a judgment accordingly. They do not get involved with enforcement efforts beyond issuing rulings when creditors file motions.
Attorneys Are a Problem, Too
While Judgment Collectors says that some debtor attorneys actually encourage their clients to pay up after losing their cases, not all do. And among those that don’t, a fair number of them actually help their clients avoid paying. Needless to say that some attorneys are an additional problem that creditors need to overcome.
When attorneys are as uncooperative as their clients, they advise their clients on strategies that can help them avoid paying. A typical strategy for a debtor who owns real estate is to hide the asset by transferring the title and ownership to a family member. Doing so hides the asset from the creditor.
There are other ways to hide assets as well. In fact, for every asset a debtor owns, there is probably a way to hide it from creditors. But that’s not all debtors do. Their attorneys sometimes recommend they file for bankruptcy. They might recommend moving out of state.
Put An Expert on the Job
Three out of every four judgments are never collected simply because creditors do not have the time, skills, and financial resources to pursue payment endlessly. So what is a creditor to do when it becomes apparent that a debtor isn’t going to cooperate? Put an expert on the job.
Judgment Collectors and their colleagues around the country are collection experts. Specialized collection agencies that handle nothing but judgments know how debtors and their attorneys work. They know how to use tools like social media, public records, and skip tracing to track down debtors attempting to hide. They also know how to find assets.
In many cases, uncooperative debtors can be turned into cooperative payers if they can be made to understand they will not escape a collection agency serious about its work. If a debtor comes to realize that they cannot win, payment can usually be arranged in some way – even if it is in installments.
Only about 20% of all monetary judgments entered in U.S. courts ultimately end up being paid. That is not a very high rate of collection among creditors. Maybe things will change in the future. For now, though, debtors unwilling to pay definitely have the advantage. It is time for creditors to step up their games.