What is the Difference Between a Regular Debt and a Judgment?

Have you ever been subject to professional collection efforts as a result of not paying your debts? Have you ever had a legal judgment entered against you? If you answered ‘yes’ to both questions, you probably know the difference between a regular debt and a judgment. For the rest of us, the difference can be elusive.

Regular debts handled by standard collection agencies do not require any court intervention to collect. Judgments do. This is the big difference between the two types of debts. Furthermore, because judgments involve civil courts, they also give creditors additional resources for collecting.

If you are confused, keep reading. The following paragraphs offer a thorough explanation compliments of Salt Lake City- based Judgment Collectors.

Regular Debts Are Common Debts

What our culture defines as ‘regular’ should be easy enough to understand. Regular debts are those common debts we all have. They include things like utility bills, auto loans, mortgages, monthly cell phone plans, etc. As long as we make payments on these debts according to the agreements we have with creditors, everything is fine. Fail to make payments and any one of these debts could go to collection.

What happens when a debt goes to collection? The creditor usually sells the debt to a collection agency. Sometimes a collection agency chooses to work on contingency rather than buying debts. Either way, the agency becomes the legal entity tasked with collecting what is owed.

State and federal laws dictate how collection agencies can go about their business. Agencies are limited in everything from the phone calls they make to the bills they send in the mail. Under no circumstances can a collection agency engage in harassing behavior.

Judgments Are Entered by Courts

Any regular debt can be sent to collection if it goes unpaid. Furthermore, any regular debt can become a judgment if the creditor is willing to take the matter to civil court. This further explains the main difference between regular debts and judgments.

Judgments are the result of court orders. Simply put, a creditor files a civil lawsuit against a debtor for the purposes of compelling payment. A win by the creditor indicates that the court agrees the debt in question is both legitimate and still outstanding. A judgment is entered against the debtor, establishing a legal requirement to pay.

Unfortunately for creditors, this is where court action ceases. Courts rarely get involved in enforcement efforts, especially when the two parties are a business and its customer. Creditors and their representatives are left to devise and implement a collection strategy on their own.

Additional Collection Tools

You might be wondering why a creditor would bother pursuing a judgment if courts do not assist in collection. It’s as simple as understanding that a judgment gives creditors access to additional collection tools they would not have otherwise. For example, a judgment allows wage garnishment.

A collection agency cannot garnish your wages to collect on a regular debt. But with a judgment in hand, things change. Now the collection agency can compel your employer to withhold a certain percentage of your earnings to be applied to your debt.

Judgments allow bank account garnishment, asset seizure, and placing liens on personal property. These are all things collection agencies cannot do without a judgment.

Now you know the difference between a regular debt and a judgment. If you are a creditor frustrated by the unwillingness of some of your customers to pay, consider pursuing judgments against them. With a judgment, your collection agency has access to extra tools that could increase the chances of you getting paid.

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