When a collection agency agrees to take on a judgment case, one of the first things it looks at is the debtor’s assets. Assets are everything in judgment collection. Why? Because they are often the only thing that stands between successful collection and collection defeat.
For the record, judgments are a specific type of debt with a court order behind them. Getting a judgment requires filing a lawsuit and winning the case. A judgment rendered against the debtor almost always includes a base amount plus attorney’s fees, additional legal costs, and interest payments.
With that out of the way, let us get back to the idea of assets and their value to judgment collection. A debtor with no assets and little income is difficult to collect from. But when there are assets in play, it is an entirely different ballgame.
Asset Seizure and Sale
Although state laws differ, most states allow for the seizure and sale of at least some assets to pay outstanding judgments. The question is this: what assets are on the table in a particular state? Primary residences offer a perfect example of how states differ.
When it comes to allowing the seizure and sale of a primary residence, states approach it in one of three ways:
- Off-Limits – Some states make primary residences completely off-limits. They cannot be touched by creditors for any reason.
- Limited Availability – Some states allow primary residences to be seized and sold but with limits in place. Said limits often amount to a homestead exemption which protects a certain value of the property.
- Unlimited Availability – The third option is unlimited availability. In such a case, a creditor can seize and sell a debtor’s home and keep all the proceeds.
Seizing a primary residence would be an action of last resort. To do it, a creditor would need a writ of seizure from the court. Often times though, a creditor will look for other assets before going after a primary residence.
When Debtors Hide Their Assets
Assets are so important in the california judgment collection game that debtors often go to great lengths to hide them. A debtor might fail to list all his assets during interrogatories. He might go so far as to transfer valuable assets into the names of children or other relatives. Even selling assets and stashing the cash is not out of the question.
Judgment collectors is a Salt Lake City, UT collection agency that specializes in judgments. They handle only judgment collection cases in 11 states, including Utah, Texas, and Missouri. They once took on a case involving a debtor who claimed to have no assets. Judgment Collectors investigators began digging around. Eventually, they discovered the debtor owned an airplane hangar in another county. Armed with that information, they made contact and explained that the plane hangar was vulnerable.
Guess what happened? The debtor found a way to pay what he owed. Paying up was more palatable to him than having his hanger seized and sold. Had the hangar not been located, there is no telling if the debtor would have ever paid.
Assets Equal Leverage
The long and short of it is that assets equal leverage. Whether it is a creditor, an attorney, or collection agency specializing in judgments, finding assets gives them greater leverage in extracting payment. When push comes to shove, assets are often the only thing standing in the way of success.
Professional debt collectors know just how valuable assets are. That’s why they are quick to search for hidden assets when they take on new judgment cases. Assets often lead to victory.