Winning a money judgment in civil court settles the dispute between the two parties. But it does not settle everything. Why? Because payment still has to be collected. From the judgment creditor standpoint, collection is often the harder part of the deal. In addition, there could be long-term implications to consider.
It would be nice if every defendant showed up in court carrying a load of cash. In the event of a loss, a defendant could pay up right away. But it is safe to say that it doesn’t work that way, ever. Defendants are not prepared to pay the instant a judgment is entered by the court.
More importantly, some debtors are not prepared to pay at all. They could put off payment for months, or even years. Therein lie the long-term implications of collecting a money judgment. Creditors need to be in it for the long haul if they hope to succeed.
Statutes of Limitation
Write off the bat, judgment creditors need to be aware that money judgments are subject to statutes of limitation. A judgment is in force for a limited amount of time. The average statute of limitations is 7-10 years. However, a small handful of states have 5 and 15-year limits.
This all matters because time can really fly when a creditor is working with an uncooperative debtor. A 7-your statute of limitations can come up pretty quickly if a creditor isn’t paying attention. Yet there is a silver lining: most states allow for renewing a judgment at least once.
Time Is the Enemy
A statute of limitations forces the judgment creditor to collect within a certain time frame. The judgment debtor is afforded a certain amount of protection therein. But there is another implication for creditors: time is the enemy. As it passes, the chances of successfully collecting go down.
Every day a money judgment goes uncollected is another day a debtor needs to find a new way to avoid payment. And according to Judgment Collectors, out of Salt Lake City, Utah, avoiding payment is more common than most judgment creditors know. That is why the specialized judgment collection agency is in such demand. They handle collecting money judgments on behalf of frustrated creditors.
Time Spent Equals Money Spent
It is nearly impossible to successfully collect a money judgment without spending additional financial resources. Time spent is also money spent. It is just that simple. So the longer it takes to collect, the more the creditor is likely to spend. This is yet another reason that time is the enemy.
Creditors need to be in it for the long haul if they hope to get paid. That much has already been established. But they also need to be prepared to spend a certain amount of money on collection efforts.
Judgment Collectors explains that in many cases, creditors spend less by turning their judgments over to collection agencies. Paying professionals ends up costing less in the long run because they are more efficient and productive. They are often more successful as well.
Never Plan On An Easy Collection
Finally, the long-term implications of collecting money judgments dictate that creditors should never expect things to be easy. Collecting money judgments is challenging. It can be downright difficult when debtors know all the tricks to avoid paying.
If collecting a money judgment is in your future, think things through carefully. The long-term implications of collecting may very well dictate that your best option is to bring in a collection agency. One way or the other, you have a job ahead of you.
