Enlisting the help of a judgment collection agency is one way to increase a judgment creditor’s chances of getting paid. But bringing in an agency isn’t a given. There are plenty of cases collection agencies simply turn down. They do not want to get involved.
If you find yourself stuck with an unpaid money judgment collection agencies don’t want to get involved with, you may be wondering why. Perhaps you just assumed that any collection agency would jump at the opportunity to help you collect. Now you know otherwise. Allow me to offer some potential explanations.
The Judgment Is Too Small
The amount of money a collection agency stands to gain is in direct proportion to the monetary value of the judgment in question. Collection agencies may have turned you down because your judgment is just too small. It is so small that the agencies do not stand to make enough money on the deal.
This is fairly common for judgments awarded in small claims court. By definition, small claims are low-value claims. At a couple of hundred dollars to a few thousand, the amounts are a lot to judgment creditors. But they are small potatoes to collection agencies.
The Judgment Is Too Old
Another possible reason for rejecting a money judgment is its age. As Salt Lake City, Utah’s Judgment Collectors explains, time is the enemy in the judgment collection game. The longer it takes to get paid, the less the judgment creditor is likely to receive.
An old judgment is worth less. It could be much harder to collect, and the chances of collecting the full amount are considerably reduced. All things considered, there just isn’t enough value to convince a collection agency to get involved.
The Debtor Is Judgment-Proof
A third reason collection agencies turn down judgments is the realization that debtors are judgment-proof. A judgment-proof debtor has very little income. That means wage and bank account garnishment are off the table. He also has no assets of any real value. That takes judgment liens and writs of seizure off the table, too.
The icing on the cake is that the debtor has no reasonable prospects for the future. The chances of him getting a better paying job are slim. His chances of obtaining valuable personal property are not all that good either.
As you can see, attempting to collect from a judgment-proof debtor is like trying to get blood from a stone. This is not to say that future circumstances will not be any different. Things could change years down the road. But at the current time, there is little hope of collecting. No collection agency will take that chance.
You Are Asking Too Much
Finally, some collection agencies purchase judgments while others work on consignment. When a purchase is called for, a collection agency will usually offer pennies on the dollar. You could be struggling to find a collection agency willing to purchase your judgment because you are asking for too much. Your sale price is too high. Drop your price and you might get some bites.
You could also consider the consignment option. Consignment-based debt collection does not involve the purchase of a judgment. Instead, the collection agency supplies a service for which it is paid. The agency typically gets paid a certain portion of what is collected – but only after it collects. Collecting nothing means getting paid nothing.
If you are struggling to find a collection agency willing to help with your judgment, you now have some possible explanations. You might not be happy with them, but at least you now know some of the reasons.