subject: The Reason To Enforce Very Little Debts [print this page] I am not an attorney, I am a Judgment and Collection Agency Broker. This article is my opinion, based on my experience in California. If you need legal advice, you should contact an attorney.
Debts and judgments do not recover themselves. For this article, when the words (judgment or judgment debtor) are used, they mean debts or judgments. Judgments are stronger than debts, and almost all civil money judgments begin as debts.
Stronger than debts, there are more methods possible to recover judgments. However, when judgments are very tiny, most enforcement tools get too expensive. Judgment and debt enforcement, become rather similar - when the amount owed is tiny.
Why recover a tiny (e.g., $450) judgment? Because there is a clear relationship between the dollar amount of a judgment and its recoverability.
The chances of half, of a $400 judgment being recovered using only a little bit of effort are fairly good. The likelihood of half, of a giant judgment being enforced (with 200 times more effort) are nearly a million times less.
When a judgment is tiny, it is worth contacting the judgment debtor by mail and/or by phone, and very politely suggesting the debtor pay it off. Propose a payment plan. Emphasize how you want to help the debtor to get rid of the judgment debt without any more expenses or hassles for them.
Instead of being a bill collector, be a polite problem fixer. The combined power of being nice, then resorting inexpensive recovery procedures only if needed, is a wise combination.
Naturally, when the judgment can't be recovered by calling or mailing letters, one has choices. One can wait and let the judgment accrue interest, record an inexpensive lien or recover the judgment with cheap methods, or assign the judgment back to the creditor.
When judgment debtors are poor, maybe you can discuss a payment plan, perhaps $15-$25 a month? If you have a judgment, and when the debtor has assets but won't pay, even if you are patient and nice, consider a debtor exam in the future.
In a polite way, let the judgment debtor know that they can avoid extra expenses and/or spending hours in court, by planning a convenient repayment plan with you.
Always avoid threaten anyone. Common sense is, to bring up the topic of the debtor satisfying the judgment without using more of their time, or incurring any extra expenses for them.
Judgment debtor examinations cost money, and those expenses can often be appended to the debtor's debt. Of course, getting personally served with a court order to show up in court, may cause a debtor to find their checkbook.
If the judgment debtor does pay you after you spent additional money, be sure they pay extra to also cover your extra costs, for scheduling and serving the judgment debtor examination, etc.
The bottom line is, a judgment debtor willingly writing you a $500 check is much more likely to happen, than them writing a $40,000.00 check.
Most judgment recovery specialist's dream is to find a huge judgment and score a huge enforcement quickly and cheaply. In this economy, that does not occur often enough to be counted on as a realistic primary business plan.
For attorneys, there is no doubt that "heart attack letters" from lawyers impress some people. If you are a lawyer, one can make money with a polite, yet stern template. By mailing demand letters, you may get many payments for the cost of postage stamps.
It's time to look at smaller judgments, and move towards the goal of trying the potent tools of being nice, and selling the advantage of satisfying a judgment more often; and use expensive recovery techniques less often.
