Winning a money judgment against another party can be quite satisfying. Winning makes you feel like you have been exonerated. It might even make you feel empowered, especially when it comes time to enforce the judgment. But it’s best to let any such feelings fade a bit. Then, begin enforcement by negotiating with the debtor.
Negotiating after winning a civil lawsuit may seem counterproductive. After all, you ended up in civil court because the other party was less than cooperative in settling your original dispute. Why negotiate when you now have the power of a money judgment behind you? Your cause is just. Enforcement (think collecting the money awarded here) is your legal right.
There are undoubtedly some judgment creditors who refuse to negotiate based on the principle of the matter. The big question is whether they understand the ramifications of such a decision?
The Goal of Negotiating
The goal of negotiating is to get as much money as possible in the shortest amount of time. Remember that time is the judgment creditor’s biggest enemy. The longer it takes to get paid, the less likely a creditor is to see anything at all. Settling things quickly is usually the better option.
There are basically two ways to negotiate:
- Lump Sum Payment – Negotiating a lump sum payment would require a compromise on both sides. The debtor agrees to make payment right away. Meanwhile, the creditor agrees to accept less than what is rightfully owed.
- Monthly Installments – Negotiating monthly installments is pretty straightforward. The debtor agrees to pay on his debt monthly while the creditor suspends all further collection efforts. As long as the debtor keeps his commitment, no further action is necessary.
Judgment creditors tend to scoff at lump sum payments early in the process. They want the full amount, and rightfully so. But is holding out for the entire amount really practical?
Legitimate Reasons to Negotiate
By law, a judgment creditor has the right to collect every dime owed along with interest and legal fees. Ideally, a judgment debtor would pay the entire amount in the weeks or months immediately following a judgment being entered against him. But that rarely happens. So creditors need to think realistically. They need to consider negotiating.
Here are some legitimate reasons for doing so:
1. Enforcement Is Time Consuming
First and foremost is the reality that enforcement is time consuming. Judgment Collectors, based in Salt Lake City, UT, knows this first-hand. They explain that it takes time to make contact with the debtor and get necessary information. It takes time to search assets, obtain legal documents, and so forth.
What a judgment creditor expects completed in a matter of weeks can stretch into months or even years. Judgment Collectors has worked with clients who were several years into collection efforts.
2. Enforcement Can Be Frustrating
In addition to being time consuming, enforcement can also be frustrating. Judgment debtors do not always cooperate. In fact, they are more likely to be uncooperative. This can drive a judgment creditor crazy.
3. The Creditor Might Get Nothing
Investing time and experiencing frustration could ultimately be capped off by the creditor getting nothing for it. Imagine putting years into enforcement only to walk away with no payment whatsoever. It happens more often than most people know.
Negotiating with judgment debtors is designed to protect creditors to some extent. When there is a real possibility that enforcement could drag on for years and still not yield full payment, negotiating with a debtor is worthwhile. It is better to get something now then nothing at all.
