Today’s blog was written with the help and expertise of Aaron A. Rose, President of CenterPoint Legal Solutions, LLC , Roseville, MN. Our editor, Marti Lythgoe interviewed Aaron by phone on 8/24/17. She also drew from information contributed by Lisa H. Haster, Esq., Of Counsel/Marketing Director for Gurstel Law Firm P.A.. This spring, Lisa wrote a 4-part blog series that included What Exactly Is a Judgment and How Does It Benefit Me? and Post-Judgment Recoveries Available to a Judgment Creditor.
What Is a Judgment?
A judgment is a court order determining that you are entitled to repayment, and ordering your customer to pay you. Once a judgment is obtained, then you, as the judgment creditor, have the legal right to garnish bank accounts, go after wages, and put liens on property. Judgments are intended to entice the non-paying customer (the “debtor”) to voluntarily pay you. In the event that the debtor fails to pay voluntarily, you still have legal recourse.
Non-Performing Judgments: One of the Industry’s Most Overlooked Assets
CenterPoint Legal Solutions focuses on assisting companies and law firms turn non-performing judgments into cash. “Our industry has put a premium on accounts that go to judgments. It’s relatively easy to get a lot of judgments, but only a fraction generate revenue. Most judgments simply result in a low return. Historically, many creditors and attorneys start litigation in order to be the first to get whatever the consumer is potentially able to pay. They’ve sued but the debtor is still not paying. Notwithstanding, a judgment is now a distinct asset type in and of itself and should be viewed as such. The focus now shifts to identifiable assets and ROI on executing against those assets. Creditors have spent hundreds of dollars to get to that point, but now have to go outside the norm to benefit from that initial investment. They can’t simply rely on historical practices that aren’t working,” Aaron explained.
When you have a judgment you have to understand what your legal resources are. “Now that we have it, what do we do? What are the best practices?” Because of interest accrued on the debt, a judgment could be more valuable today than it ever was, but if you can’t find a debtor’s assets, it’s no better than when you got it. Aaron shares his Best Practices with our readers:
1. Skip tracing: Effective skip tracing involves first working backward from how we can get the most money as quickly as possible, while spending the least amount. Start with the jurisdictions that you know are most profitable. Where do the debtors reside (one state vs. another or even counties)? Consider post- judgment court and service costs in the areas for actions like garnishment and/or a bank levy process.
Use traditional data sources and cross-referencing of the same as much as you can. This most often also includes forms of social media. Continuously monitor data for changes in the person’s life. For example, if the person applies for a loan, buys a house, or moves, do additional research to find newly discoverable assets. A service/data provider within the industry can tell you when something changes.
Then manually call all possible leads to find a place of employment. This means implementing a solid, continuously evolving agent-training program. These agents will be your Courteous, Compliant, Curious (“CCC”) investigators. The person on the phone must be personable and ask the right questions. They must pick up the phone and call previous employers and known associates, following the trail to a current employer. Use scripts. Use an affordable speech analytics tool like CallMiner. Speech analytics can verify procedural compliance and best behaviors for successful asset verification.
Record all calls. Listen in to make sure the people on the phone are asking the right questions and not accepting open-ended answers. In addition to verifying employment, this information is often useful in determining other legal remedies. Use the information to determine whether to execute on the judgment now. If the debtor only works part-time, is self- or temporarily employed, or the head-of-household, you most likely won’t want to garnish now, but you can at least “get in line,” where worthwhile. Your inquiries may also prompt a call, generating a dialogue with the debtor and an eventual payment plan. Continue allocating your resources throughout the process to get the greatest ROI possible.
2. Bank verification: Account segmentation and speed to execution are key to the greatest ROI. Bank vendors will sell you information about who has bank accounts. Again, inquiries can create a dialogue with the debtor. If payment is not forthcoming, petition the court for the right to freeze assets. The debtor may have the ability but not be willing to pay. Some would rather set up a payment plan. Every step of the process is to increase urgency and find a less intrusive option. You typically look to avoid implementing the last resort whenever possible.
3. Be compliant with all rules and regulations throughout the post-judgment process: Know what is valid in your jurisdiction(s). Post-judgment compliance practices are often very document-driven. Have processes in place to determine if your judgment is still valid. Does the court show it as already satisfied? Has the judgment expired or is it about to expire? If you’re using an attorney different from the one who got the judgment, you will need to get a Substitution of Counsel. If you’re not the Plaintiff/Creditor named on the judgment, you will need to get an Assignment of Judgment. If the Defendant has moved to a jurisdiction different from the judgment jurisdiction, you will need to domesticate it in the new jurisdiction prior to exercising post-judgment remedies. If a judgment is satisfied, you almost always need to file a satisfaction of judgment specific to the rules of each jurisdiction.
4. That which is not measured is not managed: A successful post-judgment program requires post-judgment-specific performance metrics. These measurements are across both internal and external teams. In addition to metrics around asset verification, you’ll want to implement the following:
- Use attorneys with a demonstrated track record of post-judgment-specific practices. Develop scorecards around post-judgment remedies specific to your particular jurisdiction(s). Where possible, have your attorneys seek out additional assets through disclosures requiring either the debtor and/or third parties to provide information regarding assets. For additional information, see Lisa’s blog, Post-Judgment Recoveries Available to a Judgment Creditor.
- Develop post-judgment-specific media processes. Just as you measure asset verification and post-judgment execution, you should establish metrics for document management throughout the post-judgment process. This includes establishing the same at the judgment creditor level. This will help ensure all teams have what they need to continue moving forward as expeditiously as possible.
5. Use a Non-Performing Judgment Program like what is offered by CenterPoint Legal Solutions. They offer consultative help across all aspects of managing a program, or they will provide contingency-based master servicing services for the entire process. They service debt buyers, issuers, regional law firms, etc. They use vetted attorneys like those that are with The National List.
For referrals to attorneys specializing in post-judgement litigation, call The National List at (800) 227-1675.
Interview with Aaron A. Rose – President, CenterPoint Legal Solutions, LLC
- 2700 Snelling Ave. N., Ste. 250
- Roseville, MN 55113