Are you a small business owner with an outstanding money judgment against a former client? Have you been struggling for years to collect? If so, how are your investigative skills? It turns out that investigative skills are crucial to successful collection.
It would be nice if judgment collection were as simple as sending the debtor a bill and waiting for a check to arrive within the next 10-30 days. But that is not how this works. In most cases, judgment creditors found themselves having to go to court because the individuals they were dealing with proved less than cooperative. Winning a judgment is not going to make the debtors any more cooperative.
Assets Equal Payment
Anyone who has been involved in judgment enforcement, from either side of the courtroom, knows one of the fundamental truths of collection: assets equal payment. Assets are the currency through which money judgments are paid. So creditors have to know what types of assets their debtors have in order to pursue appropriate collection strategies.
Your typical judgment debtor doesn’t have mountains of cash lying around. Yet creditors have a reasonable expectation the debtors will voluntarily liquidate some assets in order to pay up. Is that what happens? In some cases, yes. But in most cases, no.
Rather than liquidating assets, judgment debtors are more likely to hide them. They often do so on the advice of their attorneys. Not only that, but attorneys also tend to advise hiding assets at the first sign of a pending lawsuit. Hidden assets are harder to use as leverage once collection efforts begin in earnest.
Hidden Assets Can Be Found
A judgment creditor unable to uncover sufficient assets might ultimately give up and walk away. Unfortunately, this happens more often than not. Far too many judgment creditors give up far too quickly. They don’t realize that hidden assets can be found if one knows where to look. Therein lies the problem.
Your typical judgment creditor doesn’t collect judgments for a living. Judgment collection is something creditors are forced into as a result of civil litigation. But creditors do not have to go it alone. They can bring in a private investigator or judgment collection service.
My preference is a judgment collection service like Utah based Judgment Collectors. The Salt Lake City agency helps collect judgments in 11 states including Utah, California, and Michigan.
They Know Where and How to Look
Skilled investigators, whether they work for collection agencies or private investigation services, know where and how to look for assets. Asset discovery is one of their specialties. They give judgment creditors a distinct advantage in that they thwart debtor efforts to hide assets.
A skilled investigator can discover:
- Nonexempt real estate.
- Bank accounts and money markets.
- Certificates of deposit.
- Stocks, bonds, mutual funds, etc.
- Nonexempt retirement accounts.
- Motor vehicles and boats.
- RVs and other leisure vehicles.
Skilled investigators are also very good at learning the truth about debtor employment and income. They are particularly good at skip tracing, the practice of finding debtors who have moved away and not provided forwarding information.
The Difference Between Winning and Losing
The importance of investigative skills in judgment collection boils down to this: they are the difference between winning and losing. Strong investigative skills give the judgment creditor a distinct advantage. A lack of such skills throws that advantage to the debtor.
If you have been trying unsuccessfully to collect an outstanding judgment, your investigative skills could be your biggest weakness. Perhaps it’s time to bring in a specialized collection agency or private investigator. You need someone who can investigate on your behalf.