Winning a civil judgment against another party sets in motion a process that takes time to complete. Unfortunately for the creditor, time is of the essence. The longer a judgment goes without being paid, the less likely the creditor will ever collect.
It should be noted that creditors are bound by certain time limits during the early stages of collection. For example, some states require that creditors wait a minimum of 30 days after the initial judgment before commencing collection efforts. This is to give debtors an opportunity to appeal.
With those legal deadlines in mind, let us discuss why time is of the essence to creditors. There are five things to consider.
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1. Judgments Expire
A judgment is a civil court order. However, it is not a permanent order. Judgments have statutes of limitation attached to them, which means they expire. Utah-based Judgment Collectors says this most states limit enforcement to a 7–10-year period.
This may seem like a long time, but it’s really not. Especially if you are dealing with an experienced debtor who knows how to avoid paying. The good news is that judgments can be renewed prior to expiration.
2. Debtors Change Jobs
Time is of the essence when creditors choose to utilize wage garnishment for the simple fact that debtors change jobs. A creditor might arrange for wage garnishment only to discover that, several months down the road, payments stop. The debtor has left his job and not provided information about his new employer.
Changing jobs only delays payment further. The longer a creditor continues trying to chase payment through wage garnishment, the more difficult it becomes.
3. Debtors Move, Too
In addition to changing jobs, debtors also move. Sometimes they move explicitly to avoid paying their debts. They may leave town and head to another county. They might even leave the state. The longer a judgment remains unpaid, the more likely it is the debtor will eventually move – whether to evade paying or not.
4. Debtors Buy and Sell Assets
In many cases involving judgments left unpaid for considerable amounts of time, creditors have no other choice but to go after the debtor’s tangible assets. That is good in the sense that tangible assets have real value. But it’s bad in the sense that debtors buy and sell assets all the time.
Imagine being a creditor who attempts to extract payment through wage garnishment. You have no idea that the debtor has a piece of vacation property that could be leveraged to settle the debt. You continue pursuing wage garnishment for years.
Meanwhile, that undiscovered vacation property is put up for sale. The debtor gets his money out of it and walks away with you being none the wiser. He has the resources to pay but he will never tell you. You continue being content to receive $50 a week from his paycheck.
5. Time Only Complicates Matters
The unfortunate truth about judgment collection is that time only complicates matters. Every passing day gives a debtor more opportunities to hide assets, change addresses, and otherwise make it difficult to be tracked down.
This is one of the reasons agencies like Judgment Collectors do so well. They are experts in tracking down debtors. They have access to sophisticated skip tracing tools. Time isn’t as much an enemy for them, though collection agencies still want to settle things as quickly as possible.
Time is of the essence for anyone attempting to collect a judgment. The sooner payment is made, the better. Delaying things only reduces the chances of the debt ever being paid.