Did you know that most monetary judgments awarded by civil courts are never actually collected by creditors? I wonder how much of it is because creditors are either unwilling or unable to play the long game. I do know that collecting can take years in some cases.
Any individual or company thinking of suing another party with the hopes of winning a monetary award should not expect to be paid immediately. Things rarely work out that way. Instead, it is better to plan for a long and protracted fight against a debtor who might resist paying.
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Reasons Judgment Debtors Don’t Pay
Collecting money judgments often means playing the long game. Debtors do not always pay quickly. There are reasons, according to Salt Lake City’s Judgment Collectors. As a judgment collection agency, Judgment Collectors does nothing but work on money judgments. Here are the top five reasons they say debtors don’t pay right away:
- Insufficient income
- Little to no assets
- Bad advice from friends or family
- A firm belief that the court made a mistake
- Belligerence (they are not going to pay no matter what)
Judgment Collectors say that some judgment debtors legitimately cannot pay. They have little to no income and no assets worth hitting with property liens or writs of execution. If these same debtors also have no reasonable prospects for the future, they are considered judgment-proof.
Circumstances Can Always Change
Understanding the reasons debtors do not always pay is key to understanding why judgment collection is often a long game. Take any of the five reasons previously listed. It might not exist five years from now. Simply put, circumstances can always change.
A judgment debtor with a minimum wage job could very well be earning a lot more in a few years. A higher paying job would open the door to wage garnishment. A better job could also prompt the debtor to acquire personal property that can then be leveraged through the use of property liens.
All sorts of things can happen. People come into inheritances. They win the lottery. They get promotions, bonuses, and other types of incentive pay. The key for the judgment creditor is to keep a watchful eye on the debtor’s circumstances.
Judgments and Statutes of Limitation
In the past, state lawmakers have understood that judgment collection tends to be a long game enterprise. That is why most state legislatures have placed generous statutes of limitation on civil court cases.
The standard statute of limitations is 7-10 years. That means a creditor has 7-10 years to collect a money judgment. Furthermore, most states allow judgment renewal for another 7-10 years if necessary.
A decade to collect the money judgment? Absolutely. It can take that long. Admittedly, most creditors do not want to spend 10 years chasing bad debts. Others do. The benefit of playing the long game is the potential to get the full amount owed plus a decade’s worth of interest and late fees.
Most Creditors Need Help
I am guessing that the majority of money judgments never get collected because creditors attempt to do things on their own. The truth is that they really need help. A creditor could leave collection to the same attorney that helped win the court case. But a better option is a judgment collection agency like Judgment Collectors.
Playing the long game significantly increases the chances of getting paid after a money judgment is awarded. Creditors not willing to play the long game are at a much higher risk of never being paid. That’s just the way the system works.
