Imagine being taken to court by a creditor tired of waiting for you to pay what you owe. The court rules in the creditor’s favor, and you are on the hook for what you owe plus legal expenses. One would hope you would make every effort to pay. But if you did not, you wouldn’t be alone.
Upwards of 80% of all judgments are never fully enforced. There are several reasons for this, but most boil down to one dirty little secret far too many debtors know: where judgments are concerned, the ability to wait things out works to their advantage. If they can stall long enough, their creditors will eventually give up.
Limited Enforcement Time
Nearly every state puts a time limit on enforcing judgments. It is 7 to 10 years, on average. If a company fails to collect during that time, there are only two options. The company can go back to court to have the judgment renewed, or they can forget about it and walk away.
If you were a debtor and you knew this, would you be likely to stall for as long as you could? Unfortunately, that is the case far too often. Debtors either learn about the time limits on their own or are advised of them by their attorneys. In either case, they make a full-time job out of hiding assets and avoiding payment with the expectation that their creditors will not have the endurance to keep pursuing them perpetually.
Let’s Transfer Assets
A popular way to play the waiting game is to transfer assets. This is fairly easy to do thanks to the way judgment enforcement is set up. Under the law, a court only enters a judgment against the defendant. It is up to the plaintiff and their attorney to enforce that judgment.
Without direct intervention from the court, defendants can take their sweet time producing documents and answering questions. The longer they stall, the more opportunities they have to quietly transfer assets to willing family members, friends, etc. By the time a creditor catches up, there is nothing left to work with.
Conducting Prejudgment Research
According to Salt Lake City-based Judgment Collectors, plaintiffs are not at a complete disadvantage. They have a few secret weapons of their own, not the least of which is prejudgment research. Also known as prejudgment forensic analysis, this is research conducted by the plaintiff or their attorney before a judgment is ever pursued.
Such research can be done quietly and without raising red flags. It is a powerful tool for discovering a debtor’s assets in advance of seeking a judgment. That way, when the judgment is finally entered against the debtor, the plaintiff can make it clear that the debtor’s assets are already known.
Initiative Is Required
Debtors succeed in playing the waiting game only when creditors fail to show initiative. Therein lies the secret to success among firms like Judgment Collectors. A little initiative goes a long way. A willingness to dig around for information in the most unlikely places can produce results that surprise even experienced debtors.
Debtors know the secret to avoid paying outstanding judgments: play the waiting game. Some have perfected the practice over many years of doing it. In the end, that’s really why so many judgments are never fully enforced.
If your company is struggling to collect on unpaid judgments that are years old, there is a good chance your debtors are trying to wait you out. You can play the game or turn your judgments over to a firm that knows how to outsmart deadbeats. It’s your choice.