Outsourcing Your Money Judgment - Part II
When is it best to assign your judgment to a judgment recovery specialist? The more difficult a collection is expected to be, the better the case for a recovery specialist. Here are a few things, one or more of which could signify the need for assigning your judgment:
• You don't know where the debtor is.
• You don't know if there are assets.
• The debtor is hiding assets.
• You think there are assets, but they have been transferred to another person or company.
• You have spent a significant sum on legal fees fighting the debtor and getting the judgment in court. (Good indication post-judgment will be no different.)
• You have already had an attorney or collection agency try to collect, without success.
• The debtor has filed bankruptcy but you suspect it is fraudulent.
• You are tired, emotionally spent and want it to be 'somebody else's' problem.
• You have a 'default' judgment. (This type of judgment is frequently open to attack once enforcement is launched.)
• The judgment is a complicated, convoluted 'mess' - shell companies, alter ego, successor corporations, aliases, fraudulent transfers, etc. (Exactly the sort of case that is too expensive for an attorney and too complicated for a 'general' collection agency.)
• Your debtor has died.
Are there drawbacks to assigning your judgment to a judgment recovery specialist? There could be. If you have definite ideas about how a judgment should be collected and approached and wish to retain total control, it is probably best to handle it yourself or be represented by an attorney. Be mindful that when you assign your judgment to a judgment collector, all 'rights, title and interest' pass to the collector - otherwise known as the 'assignee'. Thus the recovery specialist becomes the 'judgment creditor'. If they 'flake out' you could be in trouble. While the vast majority of judgment collectors are honest, a few have gone out of business and still fewer have failed to pay monies due. Choose wisely. Look for someone who is established and reputable. In many cases, the decision to assign a judgment can be the only viable alternative when all the circumstances are considered. Every day, judgment collectors are filing satisfactions on difficult cases which are years - and sometimes decades old.
When should you assign your judgment to a general collection agency? In my opinion, almost never. Large general collection agencies deal in volume. If your judgment is 'easy', they will have no problem collecting. However, if the judgment is 'easy', why not collect it yourself and keep 100% of the amount? I have had too many cases land on my desk which have languished at collection agencies for years, with no results. Phone calls, threats, dunning letters are ineffective with judgment debtors and serve no purpose. Most collectors deal in volume and cannot spend the resources necessary to collect a judgment, especially a convoluted case. (And most judgments entail a wrinkle or two.)
©2010 Ramona Featherby