Taking someone to civil court in hopes of winning a money judgment is one way to get justice. But it has often been said that winning a money judgment is easier than collecting it. Given the fact that the vast majority of money judgments are never paid, I suspect such sentiments are true.
Let us say you took someone to court and won. How would you go about collecting the debt? Plenty of experts recommend trying to work out a payment plan with the losing party, also known as the judgment debtor. As the judgment creditor, you hold most of the cards immediately after the civil trial. But as time goes on, the playing field is leveled.
The longer it takes to get paid, the more advantage you lose to the judgment debtor. This reality is just one of the reasons to establish a viable payment plan that works for both parties. There are five more to consider.
1. Avoid Antagonizing the Debtor
There is a real temptation to go on offense when trying to collect a judgment. There is a temptation to be harsh, aggressive, and unwavering. But doing so often antagonizes the debtor – and does so needlessly. It is far better to take a more reserved approach.
Antagonizing a debtor only makes him feel threatened. Working out a payment plan does just the opposite. A debtor who feels like he is being given an honest chance to make good on his debt without further repercussions is more likely to try to pay off that debt.
2. Save Money With the Payment Plan
Skipping over the payment plan option means utilizing other means to get paid. In nearly every case, those other means cost additional money. Do you want to garnish the debtor’s paycheck and bank account? There are court costs involved. Likewise for filing property liens and requesting writs of seizure.
Even bringing in a collection agency costs money. The people behind Salt Lake City’s Judgment Collectors say that fees vary across the industry. But no collection agency works for free. As for a payment plan, it doesn’t cost a dime. And most states allow tacking on interest for your trouble.
3. No Need for Additional Collection Efforts
If you can work out a payment plan with the debtor, there will be no need for additional collection efforts. You won’t have to worry about running property searches to find hidden assets. You will not have to worry about making sure the letters you send and phone calls you make comply with collection law. Once you have a payment plan in writing, the only thing left to do is wait for the payments to come in.
4. A Higher Chance of Being Paid in Full
Another good reason to work out a payment plan is to increase your chances of being paid in full. Oftentimes, when collection is left to attorneys and collection agencies, you get less than the full amount. Sure, waiting on monthly payments takes time. But the trade-off is getting the full amount owed.
5. You Can Forget About It
Finally, working out a payment plan means you can finally forget about that judgment. You can move on with your life and focus on more important things. Working out a payment plan means the judgment no longer controls your life. You are backed in control while the payment plan takes care of itself.
One final word: judgment debtors are not always amenable to payment plans. If trying to work out a plan fails, you still have other options to pursue.
