Taking a business or individual to court over unpaid debt can pay off in the form of a money judgment entered against that party. Enforcing the judgment is a matter of actually collecting. In the judgment collection industry, enforcement is sometimes referred to as the ‘last mile’ of debt.
The ‘last mile’ concept has been borrowed from the logistics sector. Think of it in terms of online shopping. The company you purchased from utilizes its own nationwide distribution network to get your package from origin to a local hub. Then a smaller, localized carrier covers the last mile to get it to your front door.
How does this play out in debt collection? The last-mile carrier is ultimately the person or entity that takes on the task of collecting your debt.
Your Three Choices for the Last Mile
While civil courts render judgments, they do not enforce them. Enforcement is left up to the judgment creditor and its agents. As a creditor, you basically have three options:
1. Keep Collection In-House
The first option is one that so many businesses try and fail at: keeping collections in-house. The last mile provider ends up being the company’s accounting department, a department staffed by people who are very good at day-to-day accounting but who lack any formal training in judgment collection.
2. Give the Job to Your Attorney
Some businesses understand the challenges of in-house collection. They give the job to their attorneys instead. Engaging the company attorney is probably a better move, but it is not without its drawbacks.
First, attorneys are not necessarily all that skilled in judgment collection either. Second, they have plenty of other work to keep them busy. How much time and energy will they have to devote to your judgment?
3. Hire a Specialized Collection Agency
The third option is the one that makes the most sense: hiring a specialized collection agency to be the last-mile provider. A specialized collection agency is one that only handles money judgments. Utah-based Judgment Collectors is the perfect example.
Why a Collection Agency Is the Best Choice
A specialized collection agency is to judgment collection what that local carrier is to last mild delivery. The agency isn’t distracted by other sorts of debts. They know the layout of the land, the quickest and most efficient routes to get them to full payment, and how to use every tool at their disposal to get the job done.
Bear in mind that money judgments are more than just debts. They are also legally recognized court orders. These things exist, and the means of enforcing them involve tools that require further legal procedures. The most common judgment collection strategies are:
- Wage garnishment (requires a court order)
- Bank levy (requires a court order)
- Judgment liens (requires a court filing)
- Writs of execution (requires a court order)
Making use of these tools requires an exhaustive search of debtor income streams and assets. This is one area in particular where specialized collection agencies truly shine. They can find income streams and assets that attorneys and in-house accounting teams cannot.
The Right Choice for the Job
The last mile of debt can be difficult. If you do not know what you are doing, attempting to collect a money judgment can ultimately be more trouble than it’s worth. For my money, the right choice for the job is a specialized collection agency. A proven collection agency with a strong team is more likely to succeed than the in-house accounting team or the company attorney.
