Winning a civil lawsuit and subsequent judgment might lead to a company hiring professional judgment collectors to handle enforcement. In such cases, one of the first things the judgment collection agency does is search for real estate assets. Professional collectors love real estate because it represents one of their best chances for success.
This post will explain why real estate is so attractive to professional judgment collectors. Note that what you read here constitutes general principles. The states regulate judgments differently, so the rules are not always the same.
1. Real Estate Has Intrinsic Value
It is difficult for a debtor to make the case of not having the financial means to pay if he is holding real estate assets. Real estate has intrinsic value. It can always be sold and proceeds used to make good on outstanding debts. Furthermore, there is no other asset with the same kind of stability as real estate.
2. Real Estate Is Easily Leveraged
Real estate is easily leveraged by collection agencies to extract payment. The one exception is a debtor’s primary residence. According to Salt Lake City judgment collection agency Judgment Collectors, most states do not allow judgment creditors to seize a debtor’s primary residence and the property on which it sits. However, that does not prevent creditors from placing judgment liens on said property.
All other real estate assets are up for grabs. If a debtor owns a piece of vacation property on the coast, it can be seized and sold. The same goes for that mountain hunting cabin and the fifty acres on which it sits.
3. Real Estate Is Hard to Hide
Another reason judgment collectors love real estate is that it is hard to hide. Real estate records are public records. Anyone with the willingness and fortitude can request property tax records for the purposes of scanning them in hopes of finding assets owned by the debtor. But that is not where it stops.
Real estate transactions are also recorded in public databases. Judgment collectors can scan transaction records looking for the name of the debtor. If there is a suspicion that a debtor owns real estate in the particular region, experienced collectors will begin searching the records in that area to look for any sales or purchases involving the debtor.
This may sound like a lot of digging, but it is all in a day’s work for a professional debt collector. The pros know how to search property records quickly and efficiently. They have automated tools that make the job easier.
4. It Is Subject to Post-Judgment Restrictions
Properties that can be seized and sold to satisfy outstanding judgments are known as non-exempt properties. Most states restrict what property owners can do with their non-exempt real estate post-judgment.
For example, a debtor might decide that the best way to keep his vacation home from being seized is to transfer ownership to a family member. Attempting a transfer after a judgment has been entered against him would be illegal in most states. Going through with it would give the creditor yet another avenue to sue.
The important thing to remember about real estate is that it represents the greatest chances of collecting an outstanding judgment. Creditors can garnish wages, bank accounts, and investments in many states. But garnishment is a slow road to travel.
Likewise, all sorts of non-exempt assets can be seized to pay off a judgment. But very few assets offer the value you get from real estate. When a debtor owns non-exempt real estate, it is the first thing pro judgment collectors zero-in on. That is where the big money is.