An experienced debt collector wants to know everything possible about the debtor he is pursuing. That goes double, and perhaps even triple, when a debt collector is attempting to collect an outstanding judgment. Needless to say, debtor information is crucial to judgment collection. If you want to know why, keep reading.
Judgments Are a Different Kind of Debt
When most of us think of debts that have gone to collection, we think of things like unpaid utility bills and overdo car payments. Judgments are a different kind of debt. They might start out as unpaid utility bills and similar types of debts, but they become judgment debts when a civil court renders a judgment against the debtor, a judgment that includes the amount owed.
Imagine a utility company taking you to court over an unpaid balance. Winning the case against you establishes the legitimacy of the debt under the law. A monetary award goes to the utility company, an award that includes the amount you owe plus the company’s court costs, attorneys’ fees, and even penalties and interest.
Additional Debt Collection Tools
Given that you owe the debt anyway, why would the utility company take you to court? Because obtaining a judgment against you gives the company access to additional collection tools that are not available without a judgment. These collection tools underscore why it’s so important for creditors to get as much information on their debtors as possible.
Debtor information is crucial to the following collection strategies:
- Wage and bank account garnishment
- Garnishment of tax refunds, securities, etc.
- Filing property and/or judgment liens
- Obtaining writs of execution to seize and sell property.
Any plan to garnish your wages would require a certain amount of knowledge. The utility company would need to know where you work, how much you make, and how frequently you get paid. The company will need to know information about your financial accounts if they plan to garnish your checking or savings account.
How Information Is Gathered
Understanding how important information is to judgment collection, it is imperative for creditors to use every means at their disposal to gather what they need. In a perfect world, debtors would freely offer all the required information without issue. But that is rarely how it works in reality.
Salt Lake City-based Judgment Collectors explains that creditors and their collection agents have a number of options for gathering information from uncooperative debtors:
- Interrogatories – Interrogatories are written questions furnished to the debtor through their attorney. The debtor is expected to answer truthfully, fully, and in a timely manner.
- Debtor’s Exam – A debtor’s exam is a court hearing during which the creditor asks questions the debtor is compelled to answer. Some states allow courts to issue bench warrants calling for the detention and forced participation of uncooperative debtors.
- Records Searches – Organizations like Judgment Collectors make use of a variety of online sources to check public records. For example, county property records could reveal a piece of property a debtor is trying to keep hidden.
Skip tracing is another popular tool frequently utilized by judgment collection agencies and private detectives. Skip tracing is the practice of leveraging both public databases and private sources of information to locate debtors who are trying to hide.
Successful judgment collection often rests in the data gathered by the creditor. The better and more accurate the information, the more leverage a creditor needs to extract payment. The opposite is also true. Insufficient or false information only makes collection that much harder on a creditor. That is just how it works.
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