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February 24, 2024
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The #1 Reason So Many Judgments Go Uncollected

Millions of dollars are awarded in civil judgments every year. Most awards are comparatively small, at a few thousand dollars or less. Some can be quite substantial. But most of the judgments entered in county courts around the country are ultimately never collected. Why is that?

There are a lot of little things that add up to make collections difficult. But when you boil it down to the fundamentals, the number one reason so many judgments go uncollected is this: courts cannot compel payment. They can enter judgments, force debtors to participate in interrogatories, and even issue writs allowing creditors to seize and sell debtor property. But courts cannot extract money from debtors who refuse to pay.

Not Like Criminal Court

Being unable to compel payment is one of several things that distinguishes civil court from its criminal counterpart. If a debtor loses a court case and then still refuses to pay, a court’s options are limited. It is different in criminal court.

A criminal defendant found guilty is automatically subject to sentencing. The court determines their sentence based on the crime committed, its severity, its impact on victims, and other factors. At the end of the day, the court passes sentence, and it is imposed on the individual whether he likes it or not.

Let us say a convicted criminal is sentenced to five years in prison. He is led from the courtroom by deputies who immediately escort him to the county jail. He is shipped off to prison soon thereafter. The criminal has no say in the matter. No such thing occurs in civil court.

Responsibility Lies with the Creditor

Once a judgment has been entered, the court’s job is mostly done. There may be a few circumstances here and there requiring additional court involvement. But for the most part, the judgment creditor is on his own. Creditors are responsible for collecting any and all unpaid amounts.

It wasn’t all that long ago that we had debtor’s prisons operating in the U.S. A debtor unable to pay his debts would be thrown into prison until such time as he could. Debtor’s prison seems both impractical and illogical by modern standards. Perhaps it was. But the threat of prison time did at least motivate people to pay their bills.

These days, judgment creditors can no longer have debtors thrown into prison. But that does not mean they are powerless to fight back against debtors who refuse to pay. Judgment collectors, a Utah-based judgment collection agency, offers the following suggestions:

  • Garnishment – Garnishment is the process of legally extracting money from a debtor’s wages or bank account to satisfy a debt.

  • Judgment Liens – A judgment lien is a legal instrument that gives creditors a financial interest in real property owned by debtors. Liens force debtors to pay their bills when they sell the attached properties.

  • Asset Seizure – Many states give creditors the legal authority to seize certain assets and sell them to settle a debt. However, not all assets are on the table.

It might seem that asset seizure, all by itself, is handy for compelling judgment debtors to pay. That it is. But what if a particular debtor doesn’t have any valuable assets? What if that debtor does not have anything worth placing a lien on or enough income to be garnished?

The truth of the matter is that courts rarely get involved in compelling payment. So just because a creditor is successful in civil court doesn’t mean they will actually get paid. And now you know why judgment collection efforts fail more often than they succeed.

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