Judgment recovery involves collecting money or property from a debtor after a court issues an injunction in favor of a creditor. The creditor can pursue recovery themselves or sell/assign the judgment to a third party. Options for collecting from a debtor include wage garnishment, seizure of assets, and forced sale of assets. Selling the judgment to a collection agency is another option, but the creditor must ensure the agency is trustworthy and follows the law.
Judgment recovery is the process of identifying and collecting money or property, or garnishing a debtor’s assets after a court issues an injunction in favor of a creditor. It concerns all the activities that the creditor can legally exercise between the moment when the judgment has been pronounced by the court and when the debt is actually received in hand. The creditor can pursue the recovery of the debt himself, or he can sell or assign the judgment to a third party who deals with recovery or judgment collection.
Courts in most jurisdictions allow a creditor to subpoena a person who owes him money or property to determine the parameters of the debt and receive an official statement, or judgment, from the court. A judgment establishes a creditor’s legal right to compensation. A court ruling, however, is only an official announcement that the debt is due. The courts are not interested in the recovery of judgment and are not involved in the process of collecting money or property for the creditor. Indeed, many court decisions are never recovered, because the creditor is solely responsible for identifying the assets and recovering the debt, and may or may not be particularly skilled in the process.
Most jurisdictions have laws in place that allow a judgment holder to pursue certain means of collecting from a debtor. These options typically include wage garnishment, seizure of bank accounts and other liquid assets, enforcement of property liens, eviction, repossession, and forced sale of assets. The creditor is usually not required to pursue these litigation avenues under his sole authority and can often register the judgment with an officer of the law who would then retain, seize, evict, recover, seize or sell the debtor’s assets and remit the money directly. to the creditor.
Another popular option for judgment recovery is to sell or assign the judgment to a collection agency or debt collection service. The recovery business will typically pay the creditor a fraction of what they owe under the judgment if it is sold outright. Although the creditor receives less than the full amount owed, he receives it immediately and can close the book on the matter.
A creditor needs to make sure that the judgment recovery service to which he sells or assigns the debt is trustworthy. Most jurisdictions have laws that protect the debtor from harassment and unscrupulous debt collection practices. If a creditor hires a debt collection service to act as their agent, the creditor is liable for any potential violations of the law that the business may commit. If he sells the debt outright, he must ensure that the transfer of ownership of the debt is done properly to relieve him of future liability.
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