Tuesday, November 28, 2006

Pre-judgment collections & post-judgment recovery - two whole 'nother animals...

Our staff participated in an NACM Collections Teleconference, and my personal take was - the pre-judgment collections process is a whole ' nother animal from post-judgment recovery. The focus of the conference was - personal interaction with the debtor. As "Blog Master", I struggled to find even one point that applied directly to judgment recovery. I really couldn't.

Our firm has been extensively trained in - and goes out of its way to comply with - FDCPA, FCRA, GLBA, and applicable privacy law. But the reality is - we just don't have much personal interaction with the debtor. We work within the legal system, and many times, attorneys are involved, and they are the ones doing the talking for us.

In other words, we rarely, if ever, call the debtor and ask - "pretty please, will you pay off this judgment?"

We don't need to. After the judgment, the law does all the talking. This is a great advantage to pursuing a debt post-judgment.

Another difference is - collections is about getting a debt paid off right away. After judgment, hey, we've got all the way up to the state's statute of limitations to collect. That is, on average, 10 years. And those babies can, in most states, be renewed indefinitely...something debtors rarely think about when ignoring that court summons....

It's just too bad so many individuals and corporations give up on post-judgment debt, based on their pre-judgment collections experience. Creditors should continue to track their debtor's financial condition for each judgment they own, throughout its life cycle. We strongly recommend having asset searches performed on judgment debtors every 1 - 3 years. What's true for a debtor today will likely be different in 3, 5, or 7 years from now. (And all that time, the judgment is accruing interest...)

After all - post-judgment recovery is a whole 'nother animal from pre-judgment collections... and viva la difference!


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