Power of the court.
I am not an attorney; nothing in my post should be considered legal advice. If you need legal advice contact an attorney.
I read a Wall Street Business Journal article last week that talked about an in-house collector for an auto dealership, purchasing a new software program and digging in her heels and tracking down debtors to collect on the dealerships delinquent accounts. She was able to reduce the company debt by a substantial amount but at what cost? The article did not fully delve into how many man hours and other resources that were dedicated to this task.
While I feel that there is a great need for in-house collections, I believe that many business people do not understand the full power of the small claims and civil legal system. Once a legal judgment is awarded the collection game changes. When collecting a legal judgment you have the power of the court behind you, plus the money judgment award begins to accrue interest. The amount of interest varies from state to state. In addition, judgments can be assigned to third parties, who, by filing the proper paperwork with the court, can also proceed with collection using the remedies the court offers, such as Wage Garnishment, Property Seizure, Liens and Foreclosure, Bank Account levies etc… again these remedies vary state to state. Third parties do not necessarily need to be attorneys but shoud have experience working with the courts and adhere to all state and federal laws that govern debt collection.
Tags: business, courts, debt, in-house collections, legal, life, money
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