Judgment Collecting - The Other Side of Debt

With the economy trending downward many people are facing financial woes resulting from cutbacks, downsizing and even worse, the loss of a job. With the housing crunch, there has been a domino effect in place filtering down to effect almost all households in every demographic, including the rich. This has resulted in the increase in the amount of foreclosures across the United States and affected profitability in the business and commercial sectors.

Because of rising debt among all demographics, there is an increase in services targeting the public in debt relief and credit counseling services. However, the other side of the worsening economy is judgment collection. Many people will default on credit card balances and loans which will eventually lead to awarded judgments on behalf of the creditors.

There are approximately $230 billion in awarded judgments already on the books in the legal system with almost eighty percent of these judgments going uncollected. This number will most certainly rise as the state of the economy worsens as financial experts predict over the coming months which will be a boom for debt collection agencies and individuals that specialize in judgment collecting.

Winning a judgment is not difficult, however the collection process is very difficult for people that are not familiar with the collection process. Although the courts provide the judgment creditor with the power of enforcement through a variety of means, actual enforcement is very difficult for those with little experience in judgment collecting.

The court allows judgment creditors to utilize various tools such as wage garnishment, bank levies and property liens. These tools can be used for enforcement but should be used with caution, most certainly wage garnishment. Many times a judgment creditor will locate the place of employment of the judgment creditor and immediately acquire an execution of wage garnishment, sometimes with disastrous results.

Research should be the first order of business when considering wage garnishment since the judgment debtor may quit their job once the garnishment process is enforced, leaving the judgment creditor with nothing to show for his efforts. Wage garnishments are best used when a judgment debtor has been employed at their job for a significant amount of time as they will very often deal with the garnishment rather than quit the job. Judgment debtors that have recently started a job really have no vested interest in the job and will most likely leave the job and find another rather than surrender their income.

In some cases when the judgment creditor locates the place of employment of the judgment debtor, contacting them directly to possibly work out a payment plan rather than wage garnishment may be the best option. With this approach, the debtor does not feel as if they have no control and may be less resentful and more willing to work with the creditor that is judgment collecting.