Imagine taking someone to court and winning a monetary judgment against them. Getting paid is not guaranteed despite the court’s decision. In fact, you may have to undertake certain judgment collection actions, actions which could be influenced by geographic location.
Collecting and unpaid judgment is rarely as easy as it sounds. Everything from legal delays to purposeful debtor avoidance can frustrate efforts to collect. When geographic location is a concern, a judgment creditor could find himself having to overcome a number of additional obstacles.
Recorded in County Courts
Although there are exceptions to the rule, most monetary judgments are recorded by county courts. That means judgments are governed largely by county and state laws. What does this have to do with collection efforts? A lot more than you probably realize.
Wage and Bank Account Garnishment
Wage and bank account garnishment are considered low hanging fruit in the judgment collection arena. Both types of garnishment involve seizing a certain amount of the debtor’s cash assets for payment. But in nearly every state that allows garnishment, the dollar amounts creditors can seize are limited.
For example, a state may determine that a creditor can only take a certain percentage of the debtor’s disposable income. In a region with a higher cost of living, average disposable income could be a lot less compared to another region with a lower cost of living.
Local Property Values
The next thing to consider are local property values. According to Salt Lake City Utah’s Judgment Collectors, collection agencies and attorneys often look at real estate assets as leverage for collection. But we all know that property values vary throughout the country. Property values can even be considerably different among neighboring counties.
Lower property values mean less leverage for judgment collectors. Higher property values mean just the opposite. In the end, an asset’s ability to encourage payment is commensurate with its current market value.
Jurisdictional Differences
Things can get really interesting for judgment creditors when they are dealing with multiple jurisdictions. An example illustrating the point would involve a home improvement contractor who packs up and moves to a neighboring state after losing a lawsuit filed by a customer. He sets up shop in a new town that is less than 100 miles away. But now he is in a different jurisdiction.
Collection efforts in the original county could continue for as long as the debtor owns property there. He certainly has no income in that jurisdiction now that he has moved. However, it is possible to have the judgment recorded in the debtor’s new county of residence in order to pursue him where he now lives.
This is all well and good, but there may be jurisdictional differences that hinder collection efforts in the new county. Given that the debtor has crossed state lines, there may be new state laws in play.
Very Rarely Is It Easy
The point to all of this is to say that collecting on a judgment is rarely easy. Few and far between are the cases in which the losing party is prepared to pay up right away. Most collection efforts drag on for years due to legal maneuvering, delay tactics by the debtor, and issues with assets.
Even geographic location can create problems for judgment creditors. If I ever find myself on the winning end of a money judgment, I think my first call will be to a judgment collection agency. I will let the professionals handle collection efforts rather than pulling out my hair trying to do something I’m not qualified to do.
