Outsourcing Your Money Judgment - Part I

As a professional judgment collector, I am contacted on a daily basis by judgment creditors holding uncollected money judgments. Some have emerged from court newly victorious. Others have been sitting on judgments for years, and in some cases decades.

When should you collect a judgment yourself, be represented by counsel, or assign your judgment to a third party? There is no hard-and-fast answer. If there are significant unencumbered assets in the name of the judgment debtor, and you are resourceful and collection is straightforward, (i.e. bank levy, garnishment) there is no reason why you can't collect the judgment on your own. Today there is a plethora of information online to help creditors. Most courts are online and allow you to download forms required for execution of a judgment. State statutes covering the enforcement of judgments are online too. Pay a visit to your local law library. Research librarians can steer you toward the appropriate treatises for your state. Be aware, though, unless your judgment is small claims, rarely will one 'execution' result in full satisfaction. And for every enforcement action, there is an action the debtor can take to thwart your efforts. For instance, in California, if you levy on a bank account, the debtor can file a claim of exemption. If you don't fight the claim by obtaining a court hearing date and filing an 'opposition', the funds you levied upon could revert back to the debtor. Thus you must be prepared to jump through a few hoops if you are to succeed collecting the judgment yourself.

Another alternative, if you wish to outsource, is to hire an attorney. If the judgment is large and you know where the assets are, you may be best to hire this attorney on an hourly, rather than contingency, basis. While there is no shortage of collection attorneys, finding a good one is another matter entirely. You will have better luck with Google than the yellow pages. You could also try calling other attorneys and ask to whom they refer their judgments. If the same name keeps popping up, chances are there must be a reason. If you hire an attorney on an hourly basis, be very clear about the tasks requested and the anticipated costs. At 200.00-350.00 an hour, you may very quickly run up a sizable bill.

This is where using a judgment recovery specialist can be advantageous. It is cost effective. You bear no out-of-pocket costs. Even a collection agency or a contingency attorney charge for costs. This can amount to a significant amount, if you factor in fees for court filings, sheriff, service of process and private investigators. Too, if there is litigation to recover a fraudulent transfer or to obtain an order of non-dischargability in bankruptcy court, these significant costs are rarely included.

Another advantage is that judgment recovery specialists usually devote more personal attention to a case. They do not typically work hundreds of cases like collection agencies and don't report to a 'manager' to make sure they aren't spending ''too much time" on one case. Also, it has been my experience that a recovery specialist is in a better position to 'act quickly' if the case requires it, due to the absence of multiple levels of management and red tape. In judgment collection, 'timing' is everything. Thus this can be a critical factor in reaching a successful result.

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©2010 Ramona Featherby