Judgment collection services are a step above general debt collection because they involve a defined legal process established by a civil lawsuit. That being the case, there are some collection agencies that specialize in judgments alone. They serve mainly companies that have sought and won judgments against customers.
So what kinds of companies utilize judgment collection services? Any company with unpaid judgments can hire a collection agency. Still, Salt Lake City’s Judgment Collectors says that certain types of businesses are more likely to pursue judgments than others. Judgment Collectors is based in Utah and operates in several additional states.
Here are some of the types of businesses Judgment Collectors say are more likely to utilize their services:
1. Commercial and Residential Landlords
Though their business models can differ quite a bit, commercial and residential landlords have one thing in common: deadbeat tenants who don’t pay their rent. Both types of landlords often need to turn to small claims court for any kind of relief. Small claims cases result in judgments favoring the landlords.
The biggest problem they face is not being able to make contact with their former tenants. Landlords with plenty of experience in this sort of thing know enough to not waste their time. They go straight to professional judgment collection services.
2. Car Dealerships
Car dealerships that specialize in wholesale cars and on-site financing can run into problems similar to what landlord’s experience. They sell cars to customers based on in-house financing agreements. But what happens if a buyer doesn’t make his payments? A car can be repossessed – if it can be located – but repossession doesn’t guarantee past due payments are made. A judgment may be necessary to enforce collection of those payments.
3. Utility Companies
State laws tend to make it very difficult for utility companies to cut off services before unpaid bills get too large. This creates a problem in that it allows consumers who cannot pay their bills to keep running up the tab until they are so overwhelmed there is no possible hope of them ever paying at all.
When outstanding bills get out of control and utilities are cut off, collecting those unpaid bills doesn’t get any easier. Judgments are often the only way to make customers understand that their debts are a serious problem. Utility companies with judgments in hand often go straight to collection agencies for help.
4. Small B2B Enterprises
Smaller business-to-business (B2B) enterprises that run into trouble collecting on outstanding invoices will sometimes turn to traditional collection agencies for help. Other times they go straight to small claims court. When the latter choice is made, hiring a judgment collection agency to collect on the debt allows the company to get back to doing what it’s supposed to do: take care of its own customers.
Small business debt collection is a surprisingly large part of what constitutes judgment collection services. It would appear as though small businesses are just as bad at paying their bills as some consumers. Vendors are often left with little choice but to take their customers to court to get invoices paid.
Any company with a judgment in hand can pay for professional judgment collection services. A company can also attempt to collect on its own. Unfortunately, in-house collection efforts are often thwarted by the combination of a complicated legal process and debtors who don’t fall all over themselves to cooperate.
Though there are no guarantees, hiring a professional substantially increases the chances of getting paid. It is a mystery as to why more companies don’t utilize pro services after obtaining judgments.
