Collecting on a judgment is often harder than winning the judgment itself. That could be why so many companies that win judgments against deadbeat customers turn to specialized collection agencies like Judgment Collectors. It is safe to say that not all collection agencies are the same. How a particular agency does business truly matters to judgment creditors.
Judgments are essentially legal decisions rendered by courts in civil cases. As legal decisions, they are subject to state statutes. This implies that collection agencies need to be careful about what they do. Collection isn’t a free-for-all. Collection agencies must follow the rules established by law.
There Are Plenty of Them
The concept of how a collection agency does business is rooted in the fact that there are so many rules to follow. One of the first rules collection agencies face is the 30-day waiting period before any attempt is made to solicit information from the debtor. This delay is implemented to give the debtor time to decide whether to appeal.
After the 30-day waiting period, a judgment collection agency can begin soliciting information. In almost every case, the first step is to furnish written questions via the debtor’s attorney. State laws are very specific about what types of questions can be asked. Judgment creditors and their attorneys cannot ask any questions that are not directly related to collection efforts.
They can ask to be furnished with the debtor’s current address and contact information. They can request information about employment an income. They can even request a list of all the debtor’s assets. But beyond these basic things, any information not directly related to collection is off limits.
Ongoing Collection Efforts
A collection agency’s ongoing efforts to collect payment are also governed by strict rules. State laws dictate how an agency can contact debtors. Rules stipulate the contact methods that agencies can utilize, where debtors can be contacted, what time of day they can be contacted, and more.
The thing is that any violation of the rules could get a collection agency in hot water. And because creditors are ultimately responsible for how their debts are collected, a creditor could face certain repercussions if its collection agency crosses a line. Of course, this doesn’t apply if a creditor sells a judgment to the collection agency. When judgments are sold, they become the legal property of their buyers. The original creditors are no longer liable for agency misdeeds.
Industry Best Practices
Being cognizant of how a collection agency does business goes beyond following rules and regulations. It also looks at whether an agency employs industry best practices in its daily operations. Another way to look at it is to ask about the tools, strategies, and methods a collection agency utilizes to do what it does.
Does a collection agency practice skip tracing, for example? Most do. An agency that doesn’t is leaving a valuable tool on the table. Clients need to know if this sort of thing is happening. In light of that, judgment creditors should never be afraid to ask their collection agencies to provide a full account of how they do business.
Creditors can help their own causes by looking into agencies through online reviews, industry trade groups, and even the Better Business Bureau. A reputable agency will be a licensed member in good standing of some sort of trade group.
How a judgment collection agency does business really matters. Hiring an agency is not something that should be taken lightly. Making a poor choice could ultimately make a bad situation worse.