Information - The Creditor's Best Weapon

By Harold Stotland

It is no accident that every nation with an army has that armed force supported by an intelligence network. Military leaders know that knowledge of the enemy's weaponry and tactics will increase the chance of defeating that enemy.

This analogy to enforcing judgments is not missed by any attorney whose job it is to collect judgments. While it may not always be easy to obtain a judgment for a creditor, it is almost always difficult to satisfy that judgment. In fact, most collection judgments are entered by default, even the large ones.

So, what can the creditor do to assist the attorney in collecting a judgment? Our experience is that a better result is obtained when the credit manager or creditor gets involved in the enforcement process.

The creditor should never assume that the attorney handling judgment enforcement is knowledgeable and competent. The creditor or collection agency should always review the entire file and make certain that the attorney has been informed of all credit reports and credit applications that could assist the attorney in locating and levying on assets. If this documentation has already been supplied to counsel, then the creditor should remind the attorney of this fact.

I recall a case in which I had a substantial business judgment and no credit information on the judgment debtor. I asked the credit manager to talk to the sales representative. It turned out that the sales rep played golf with the debtor and was privy to personal information that helped me to collect the judgment.

In almost every substantial collection matter, someone in the creditor corporation has helpful information or documentation that would assist in obtaining satisfaction of a judgment. If the attorney handling the case is not a "live wire", it is the creditor's responsibility to get the information to that attorney and to make certain that the attorney acts on that information.

I recall another matter in which I talked to the creditor's sales representative. As a result of that conversation, I obtained the name of the debtor's largest customer. In that circumstance, we were able to issue a garnishment against that customer and satisfy the judgment quickly.

To assist in collecting a judgment, our office uses the Internet to obtain information on almost every judgment debtor through information that is available to the general public. Also, many business debtors have their own website, which often contains information that is helpful to a judgment creditor. However, the Internet does not replace interviewing people in the creditor's organization who may have personal knowledge of the debtor. Only by using old-fashioned methods combined with technology will the creditor's attorney be able to maximize the recovery on a judgment.

However, it is up to the creditor or collection agency to make certain that the attorney goes through with these procedures. If the creditor's attorney does not have time to interact with the creditor, I advise that creditor to get a new attorney.

ABOUT THE AUTHOR

Harold Stotland is a principal of the law firm of Teller, Levit & Silvertrust, P.C..