A judgment rendered at the conclusion of a civil trial often includes a monetary award. In such cases, the judgment creates two parties: the judgment creditor (winning party) and the judgment debtor (losing party). It also creates the need for information valuable to the creditor.
Judgment creditors rely on certain types of information that will aid their collection efforts. That information is typically supplied through a process known as interrogatories. Through their attorneys, creditors submit written questions debtors are expected to answer truthfully and in a timely manner.
According to JudgmentCollectors.com, a Salt Lake City collection agency specializing in judgment collection, interrogatories are confined to only the information creditors need for their collection efforts. Below are the three most important pieces of information they need.
1. The Debtor’s Current Residence
Judgment creditors need to know a debtor’s current residence. They need to know the physical address for the purposes of sending documents and serving future papers. Without the correct address, a creditor’s collection efforts are more easily frustrated.
Debtors tend to know this, which is why they are not always truthful in providing address and contact information. It is also why organizations like Judgment Collectors need to be skilled skip tracers. They must be able to locate debtors who refuse to cooperate.
2. The Debtor’s Employment Status
Next up, judgment creditors need to know about a debtor’s current employment status. An unemployed debtor will be difficult to collect from. Matters will be made worse if the debtor has no reasonable prospects of finding a job in the near future.
On the other hand, a debtor with a job may have disposable income that could be garnished. Wage garnishment is allowed in most states, although judgment creditors are only allowed to garnish a certain portion of it.
Creditors planning to utilize garnishment need to know who the debtor’s current employer is. Their attorneys then serve the employer with a garnishment order, usually by way of the county sheriff. That order remains in place until the debt has been fully paid.
3. The Debtor’s Assets
Judgment creditors need to know about all a debtor’s assets just in case seizure and sale becomes necessary. They want to know about real estate, vehicles, jewelry, collectibles, and any other assets state law allows for seizure and sale.
This particular point is tricky because laws differ from one state to the next. In a small handful of states, virtually any piece of property a judgment debtor owns is up for grabs. But in most states, there are limits on what judgment creditors can do here. Take a debtor’s primary residence, for example.
A primary residence is completely off-limits in some states. In other states, a certain value is protected against confiscation. Let us arbitrarily say there is a $100,000 limit. A judgment creditor could seize and sell a $250,000 home, but the first $100,000 of the proceeds must be returned to the debtor.
Information Is the Key to Success
Collecting outstanding judgments is rarely easy or fast. Collection tends to be a time-consuming exercise requiring plenty of patience and perseverance. Information is often the key to success.
Accurate information puts a judgment creditor in a stronger position. Inaccurate information gives the advantage to the debtor. From a creditor’s point of view, more information means better results, as long as that information is reliable.
If you ever find yourself involved in a civil lawsuit, expect information to play a critical role in the eventual outcome. It is critically important to those on the collection side of things.
