Have you lost a civil court case that resulted in a judgment being entered against you? If so, are you also banking on the fact that 80% of all judgments are never collected? That may be true, but here is what you might not know: you do not want that judgment to go to collection.
The vast majority of judgments are never collected because judgment creditors don’t know how to do it. But collection agencies specializing in judgments aren’t your average judgment creditors. They know exactly what the law allows them to do. They also know how to use every tool at their disposal to extract payment.
You might succeed waiting out the creditor until the statute of limitations comes into play. But if that creditor refers your case to a judgment collection agency, you are going to find that the tables have been turned. Continuing to avoid payment could result in consequences you’re not really happy with.
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1. Your Wages Could Be Garnished
At the very least, a judgment collection agency will know whether your state allows wage garnishment. Judgment Collectors, a judgment collection agency serving several states, says not all states allow it, but most do. That means your judgment going to collection could ultimately mean money being deducted from every paycheck until your debt is paid off.
Not worried about wage garnishment? That’s fine. Wage garnishment is just the first step. A collection agency can ramp things up by taking the next step.
2. Your Bank Accounts Could Be Garnished
Most states that allow wage garnishment also allow bank account garnishment. Think about that for a minute. Do you have a few thousand dollars in a savings account? If the collection agency finds out, you could lose it all to garnishment. And yes, collection agencies have ways of finding out.
3. You Could Face Liens on Your Property
Certain types of real property can be seized and sold to pay your debt. More on that in a minute. Exempt properties, like your primary residence, are still not free and clear. A collection agency could put a lien on your house or any other piece of property you own. What would that do?
A lien would prevent you from receiving any proceeds from the sale of your home until the debt is paid off. If you wanted to sell so you could take a job in another state, sale proceeds would go first toward paying off your mortgage. Anything remaining would go toward paying your judgment. You would still be responsible for any amount of the judgment that wasn’t covered. Meanwhile, your credit would suffer.
4. Your Assets Could Be Seized
There are plenty of non-exempt assets that can be seized and sold to pay your outstanding debt. Judgment Collectors once went after an airplane hangar that the debtor in question thought he had kept well hidden. Needless to say that the firm’s expert investigators were able to find that hangar and use the threat of seizure to encourage the debtor to pay up.
Your primary residence may be off-limits. The car you use to get to and from work may be untouchable. But if you have any extra assets, including investments, that are not on your state’s exempt list, they are up for grabs. Rest assured that collection agencies know how to find them.
You don’t want your judgment to go to collection under any circumstances. You especially don’t want it going to an agency that works on consignment. Collection agencies have every incentive to make sure you pay. They are relentless in that pursuit.