What Are Judgment Collections
Judgment collections are amounts of money owed by a debtor to a creditor which the former has been instructed by the court to pay to the latter. This is a simple description of what are judgment collections.
Reason for a Judgement Collection
When a debtor fails to repay his or her creditor, the creditor can seek legal remedies. The creditor may also try and opt for a direct negotiation or arbitration with the debtor to get paid. In a case where the creditor approaches a court and has won a judgment in favour of collecting the amount owed, the creditor can directly ask the debtor to pay or may hire a collection agency to do the same. Often creditors do not wish to engage with the debtors and let a professional collection agency do the job in which case the agency would charge a small percentage of the entire amount.
When Judgement Collections Are Used
Judgment collections may apply to a plethora of different cases. If a tenant hasn’t paid rents to the landlord for some time, has been evicted or has vacated the property without paying all the pending rents then the landlord can opt for judgment collections. If a person has borrowed money from anyone and there is proof to establish that money was borrowed then non-payment can be tackled with judgment collections. Lawsuits pertaining to financial cases often end up in judgment collections where in the debtor has to settle the loan. In some cases though, provided there are solid grounds, the debtor may be relieved of paying the loan or unpaid bills. But this is rare.
The Process of a Judgement Collection
Judgment collections are not a very complicated process if the creditor knows how to manage situations. Often, a formal letter or a business letter asking the debtor to pay up or face action such as the case being reported to credit bureaus can be sufficient to get the debtor to pay. There should be fair notice periods and the debtor should respond. Should the debtor not respond then a creditor should go ahead reporting the case to the credit bureaus and immediately seek legal recourse. Time wasted during the follow up by a creditor can allow the debtor to close down his or her bank accounts and one may hide their financial assets to avoid being compelled to pay up. Displaying that one has no money is the only weapon that a defaulting debtor has. A creditor must move fast and tactfully to avoid such consequences.
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