In the civil litigation arena, what is known as ‘judgment collection’ is essentially the practice of recovering a monetary award rendered by the court. A consumer might win a $1M personal injury award against another driver. Now he needs to collect that money. Should he consider working out a monthly payment plan with the defendant?
A monthly payment plan might be a hard sell after a long and exhausting legal process. But the winning party, also known as the judgment creditor, should seriously consider a payment plan before moving forward with collection efforts. Three reasons explain why a payment plan might be the right way to go:
1. A Payment Plan Could Reduce Friction
Rendering a verdict that includes a monetary award automatically creates friction between the two parties. The judgment creditor wants to be paid while the judgment debtor is likely to feel slighted to some degree. In some cases, the perception of being slighted causes the debtor not to want to cooperate willingly with collection efforts.
Offering a payment plan is one way to disarm a combative debtor and prevent future animosity. The debtor understands that the creditor means no harm, and that they are willing to work with the debtor to make payment as easy as possible.
An added bonus is that a court-approved payment plan settles the issue. Both creditor and the debtor can get on with their lives with no need for further legal action. After months of working through the civil court system, a payment plan could represent welcome relief.
2. Collection Gets More Difficult Over Time
Reason number two for offering a payment plan is time related. The simple fact of the matter is that collection gets more difficult as time passes. The longer it takes to collect, the less likely the creditor is to get full payment. And in so many cases, the result is no payment at all.
Unfortunately, delays are part of the collection game. A big problem for so many creditors is a busy court system that prioritizes criminal cases and trials over judgment enforcement. So when a creditor needs to rely on things like garnishment orders and writs of execution in order to collect, he is at the mercy of a court system that sees his needs as low priority.
The time it takes to work through every delay works against a creditor. But agreeing to a payment plan during the early stages of collection allows the creditor to maintain that advantage. If the debtor ever fails to live up to his end of the bargain, further collection efforts can be pursued.
3. Something Is Often Better Than Nothing
Finally, the reality that something is often better than nothing is sufficient motivation to consider offering a payment plan. Judgment Collectors, a Utah collection agency based in Salt Lake City, explains that it’s entirely possible to invest years in collection efforts only to never receive a dime. As judgment collection specialists, they know all too well how frequently it happens.
Offering a payment plan is a way to get collection started quickly. Once the debtor gets into the habit of making monthly payments, the chances are pretty good that a steady stream of payments will continue. And even if they stop after a year, the amount of money received is still greater than getting nothing at all.
Accepting a payment plan benefits the debtor as well. As such, offering one might encourage a debtor to be more cooperative. If nothing else, a payment plan should be an option judgment creditors at least consider offering.
