Judgment collection is a process that can drag on for years. There are times when a creditor gets so frustrated with not being able to collect that he allows collection efforts to gradually stop. But that doesn’t mean the judgment is forever unenforceable. There are still ways to turn it into cash.
For the purposes of this post, I will discuss what is known in the legal industry as ‘dormant’ judgments. A dormant judgment is one that has stalled because of a lack of collection efforts by the creditor. It is still legally enforceable, but the creditor must file to revive the judgment before collection efforts can resume.
Not All States Recognize Dormancy
The first thing a creditor would do is check state laws regarding dormancy. Why? Because not all states recognize it. A state with a dormancy provision requires creditors to revive dormant judgments before resuming collection efforts. There is no such requirement in states that do not recognize dormancy. A creditor can resume collection efforts at any point while the judgment is still in force.
Along the same lines, creditors should also check on statutes of limitation. Every state has a statute of limitations in place governing how long judgments can be enforced. If a creditor is quickly approaching the statute of limitations on his judgment, he will need to renew the judgment if he hopes to continue collection efforts after the original expiration date.
Run a New Asset and Income Search
With the dormancy question settled, it is time for the creditor to run a new asset and income search. After all, a lot could have changed since the judgment was allowed to go dormant. Maybe the debtor got a new job with a higher income. Perhaps he inherited a piece of property or a sizable amount of cash. Maybe he’s been putting money aside and investing it in collectibles.
When you consider the total scope of traditional and non-traditional assets that could be used to secure payment, it suddenly becomes clear just how many enforcement avenues might be available. But it is impossible to know if the creditor doesn’t run a whole new income and asset search from scratch.
It’s Okay to Get Help
Creditors looking to turn an old, dormant judgment into cash need to ask themselves why their judgments went dormant to begin with. In so many cases, creditors were forced to give up because they did not know how to move forward. What has changed since?
I bring this up because it’s okay for creditors to ask for help. Judgment Collectors, a Utah judgment collection agency, says that they do not expect clients with no experience in debt collection to know how to turn an old, dormant judgment into cash. Creditors lack the skills, knowledge, and resources.
On the other hand, a judgment collection agency makes its living collecting on behalf of clients. They know how to do the job. They have the tools and resources to get it done. To me, bringing in help is the most important aspect of turning an old, dormant judgment into cash.
It Can Be Done
One final thing to understand is that a creditor’s mindset often plays a huge role in success. A creditor needs to believe it can be done or his efforts to collect on a dormant judgment aren’t going to go very far. Dormant doesn’t mean unenforceable. It only means that the creditor has taken a break. But the creditor can revive a dormant judgment and go after payment if he is willing to put in the time and effort.
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