Obtaining a judgment against a debtor is the very last resort in any type of collection scenario, but there are times when going to court is the only option, and you have to be prepared for that when the time inevitably comes.

If you are working with a legitimate commercial debt collection agency, you should have no problem obtaining a judgment against the debtor you are attempting to collect from. However, you might be wondering exactly what happens once that judgment is obtained.

In most cases, the situation plays out in one of four ways, so let’s take a closer look at each of those possibilities.

Consumer Pays Their Debt

While it isn’t the most common result after obtaining a judgment, the ideal situation is one where a debtor fully complies with the court and pays off their debt.

This payment could come in one lump sum, or it could happen as part of an agreed upon payment plan. And in some cases, the debtor may even request that the payments are garnished from their regular paycheck, which is legal now that a formal judgment has been obtained.

Consumer Fails to Pay

The much more common scenario in cases where a judgment is obtained is that the debtor continues about their business and refuses to comply with the decision in any way.

When this happens, the court has the power to garnish their paychecks in order to help you recoup what is owed.

You can also report unpaid judgments to the credit bureaus, which will make it more difficult for a consumer to apply for any new credit in the future.

Consumer Appeals the Judgment

One way that a consumer can prolong making those payments is to appeal the judgment to a higher or different court. The specifics depend on the local laws in your state, but you may have to make another court appearance to restate your case.

There are many different reasons that a consumer can appeal a judgment, but almost all of them will require you to present the same evidence that you brought against the debtor in order to obtain the first judgment.

And if you were correct in obtaining that first judgment, the next court will likely side with you as well, so this is just the debtor’s way of drawing out the inevitable outcome where you obtain a legal judgment against them.

Consumer Files for Bankruptcy

The fourth way that things could play out after a judgment is obtained against a debtor is that the debtor could just file for bankruptcy protection and effectively walk away from all of their outstanding debts.

Because bankruptcies are a massive black mark on a consumer’s credit for years after the fact, this is a fairly drastic measure, but it is actually a very common one in cases where a debtor has reached the point of having judgments filed against them.

No matter how your situation plays out after obtaining a judgment against a debtor, everything is going to go smoother if you have an experienced commercial debt collection agency walking you through the process. For that reason, we recommend establishing a relationship with an agency today so that you know you will be protected in the future.