Hire Judgment Experts Or Outsource Them?
Companies have outsourced their judgment and debt collections for years
. The current economy has helped to create an additional opportunity for judgment enforcers, collection agencies, and collection departments to also outsource certain judgments for collection. This article is my opinion and is not, legal advice. I am a judgment broker, and not an attorney. When you ever want a strategy to use or legal advice, please contact a lawyer.
To enforce judgments, not every collection agency will work. Many collection agencies will not be a good match as most do not recover judgments or are too expensive, or do not use attorneys to recover judgments. There are advantages to using collection lawyers to enforce judgments, including they're welcomed in all court, know their stuff, and often intimidate debtors to pay faster. An ideal company to outsource debts and judgments to, is one that has these five features:
1) Lawyer-based, having lawyers in all fifty states.
2) Cost effective, under 35% is preferred.
3) Big enough so you don't depend only on one individual, however not too big to care about your business.
4) Licensed with all 50 states, and an ability to recover judgments in most countries is a plus.
5) No up-front fees, and preferably not any fees whatsoever. Note that when companies are owned by lawyers, and uses them, state laws might require the creditors they represent to pay modest court filing expenses, if they're needed. That is unfortunate, yet if a judgment owner was recovering the judgment themselves they would have to pay the same court costs. Also, if a judgment enforcer was recovering the judgment, such fees would be taken off the top, before the collections were split.
If a collection company has all five of those benefits, with competitive fees (e.g.) 33.3%, it can make sense for a company or person to consider outsourcing some of their debts or judgments. Even when a collection agency or judgment recovery specialist (enforcer) has 50/50 contingency agreements with creditors, if an outsourced professional recovery company charges 33.3% to recover, the numbers can make sense. There's at least two ways that potential collections can be shared, one way is to pay the original judgment owner 50%, and the enforcer keeps 16.6%, or the enforcer keeps 33.3% and splits the other 33.3% with the original judgment owner. Another choice is between those two, giving the original judgment owner the bigger share.
Outsourcing debt and judgment collection makes sense when a recovery specialist gets too busy, or a debtor absconds to another state, or the situation with the judgment is too complex. It also makes sense for collection departments and companies that do not have enough workers to recover their own debts or judgments. Some companies have outsourced judgment recoveries when their primary business isn't judgments, or after a key judgment recovery worker quits.
Individuals and businesses, with judgments that need to be enforced, will find that if they pick the right company to outsource to, they will save time, hassles, and money. The best feature of outsourcing a judgment for recovery is, usually one does not have to release ownership. Not assigning your judgment adds a level of safety. Not changing the ownership of a judgment is also really convenient.
by: Mark Shapiro
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