The winners of civil lawsuits become judgment creditors following litigation. As creditors, they can attempt to collect on their own or employ some sort of representative to do it for them. One possibility is sending a judgment to collection. Far too few judgment creditors do so.
Trying to collect in-house is a bad idea unless the winning party has collection experts on staff. Otherwise, inexperienced staff members can get bogged down in the process. They can end up working on a judgment for years until they eventually run out of time. And by the way, time is the #1 reason to send judgments to collection.
Statutes of Limitation on Judgments
A judgment is a court decision rendered in a civil case. Like almost everything else having to do with the law, judgments are governed by statutes of limitation. In simple terms, judgment creditors do not have forever to collect. They only have a limited amount of time.
Judgment Collectors is a specialist collection agency in Utah. They work to help collect judgments in 11 states. They say that statutes of limitation vary from one state to the next. It might be 7 years in one state and 10 in another.
Regardless of the number of years, creditors who don’t know what they are doing can find themselves up against the clock after failing to collect for years on end. Then what happens? It depends on the state.
Reviving Expiring Judgments
Most states allow creditors to revive an expiring judgment at least once. Let us say you have a state with a 7-year statute of limitations and the ability to revive for another 7 years. As long as the creditor files a motion to revive prior to the judgment’s current expiration date, he could be granted an additional 7 years.
Some states only allow one revival. Others allow multiple revivals while still others allow creditors to revive expiring judgments indefinitely. But the key to all of this is to get the paperwork filed before the current expiration date. Even if a case is unheard until after expiration, paperwork must be filed prior to expiration, or a judgment cannot be revived.
Very Good at Avoidance
You might think that 7-10 years is long enough to collect on a judgment, but it is nothing when creditors are dealing with experienced debtors who know how to avoid collection efforts. Those debtors are out there. Between their own knowledge and what they learn from their attorneys, they figure out how to stay one step ahead of their creditors.
Some of the avoidance tactics they use include:
- False or Incomplete Info – Providing false or incomplete financial and employment information can keep a creditor running in circles for a long time.
- Hiding or Disposing of Assets – Selling or transferring ownership of assets can limit any leverage judgment creditors have against their debtors. Debtors will sell property, transfer it to a relative, or just try to hide it.
- Skipping Town – It is not unheard of for judgment debtors to actually skip town. There are even a small number of debtors who do so with regularity. They run small businesses, get sued by their customers, and simply move to another town where they set up and start over.
It is rare for judgment debtors to willingly pay up quickly after losing a court case. Most times, collection efforts drag on year after year. Time becomes the enemy, which is why judgment creditors are better off turning collections over to an agency that specializes in judgments. Letting the experts do it is just a better choice.