Collecting a money judgment on your own is often seen as a way to save money. Financial savings may be realized, at least initially. But if collection efforts drag on for an extended amount of time, the hidden costs of DIY collection can be devastating.
Hidden costs are found in all sorts of things. We refer to them as such because we do not see them until after the fact. In the judgment collection game, some of the hidden costs are financial in nature. Others are not. But all of them are enough to make the average judgment creditor regret his decision to go DIY.
Are you looking at a money judgment you’re hoping to collect on your own? If so, consider these five hidden costs of DIY judgment collection, complements of Salt Lake City’s Judgment Collectors:
1. Time and Opportunity Costs
The best possible scenario for collecting a money judgment is receiving a check from the debtor as soon as the court case has concluded. But that rarely happens. Instead, judgment creditors typically spend endless hours investigating and tracking debtors, filing legal motions, managing court appearances, and more.
All that time is a commodity that cannot be taken back. Once spent, it is gone forever. Meanwhile, a judgment creditor is potentially missing out on opportunities to earn more money, grow a business, or whatever interests him.
2. Direct Financial Costs
There are direct financial costs associated with DIY judgment collection. Here is just a small sampling:
- Filing fees for liens, garnishments, etc.
- Service costs related to subpoenas, notifications, etc.
- Paid access to proprietary databases for research purposes.
- Domestication costs when pursuing collection in other counties or states.
DIY judgment collectors often hire attorneys to handle all things court related. But that means paying lawyers on top of normal court costs.
3. Mental and Emotional Stress
Collecting a money judgment from a debtor who insists on being uncooperative is mentally and emotionally draining. It is enough to make a small business owner feel overwhelmed. And if you’re an individual with a traditional 9-to-5 job, do you really want to add the stress of judgment collection on top of what you already need to deal with at work?
4. The Costs of Legal Missteps
Because judgments are as much court orders as they are debts, collection is subject to very strict rules. Violate the rules and you could find yourself in legal hot water. Moreover, the financial and personal costs of legal missteps can be steep.
Breaking the rules can also mean relinquishing your rights under the original judgment. Not only do you face your own legal jeopardy, but now you cannot collect the money you are rightfully owed. It is a double-edged sword.
5. Reduced Chances of Recovery
Finally, DIY judgment collection comes with a reduced likelihood of success. Your chances of recovering every dime you are owed are pretty low compared to hiring a professional to do the job for you. Speaking of hiring a professional, that’s the best way to avoid all of these hidden costs.
Agencies like Judgment Collectors are the experts in this sort of thing. They are specialized in the sense that they only deal with money judgments. Standard debts aren’t even on their radar.
A specialized collection agency knows how to track down income streams and assets. Court filings and legal procedures are all in a day’s work for them. And when you hire an agency that works on contingency, that agency is highly motivated to collect as much as possible in the shortest amount of time.