Once it becomes clear that pure collection tactics will not result in the collection of an account, one alternative is to pursue the matter through legal action. While legal action can mean many different things in most cases it involves obtaining and enforcing a judgment on a defendant or group of defendants. When you consider the volume of accounts an attorney collection firm typically manages it is easy to understand that the processes for requesting, recording and enforcing judgments need to be as automated as possible. This blog on managing requests for default judgments and the accurate entry of awarded judgments is the first in a two part series on the subject of managing judgments. The second part of the series will focus on judgment enforcement.
So what are some of the challenges attorney firms face with obtaining judgments and capturing key information about the judgment? Like everything else in the collection industry time is of the essence. Requesting a default judgment is the first critical step in the judgment process and missing a date for requesting a judgment - or requesting a judgment prematurely - usually brings a swift end to any hopes of collecting on the debt. Cogent's workflow processes allow firms to schedule activities that automate the scheduling of a request for a default judgment. Tasks to present eligible accounts to users and the printing of default judgment packages can be scheduled in a timely manner. Additionally, time-sensitive tasks can be prioritized to be worked first and managers can easily monitor backlogs and make adjustments on a real-time basis.
After the judgment has been requested and awarded another obstacle that must be overcome is the timely and accurate entry of the judgment as this is what will allow the firm to move forward with the post-judgment remedies that will lead to collecting the debt. Ironically, recording the details of an awarded judgment is often another challenge a firm faces. Typically, there are only a few people in the firm who are capable of accurately recording the details of a judgment in the firm's collections software. There are several reasons for this but primarily it is due to the complexity of reviewing and entering all of the details related to the judgment. In some cases calculations also need to be made so that adjustment entries can be applied to the balance of the account. Some of the items that need review / consideration to accurately capture the details of a judgment in the firm's collection software include:
Having limited resources capable of recording these details leads to backlogs and creates the first constraint in the judgment enforcement process.
This is a challenging obstacle for a firm to deal with. Many times the only alternative is to invest in the training of additional staffing resources to perform this task. However, this alternative can prove to be expensive and results in issues with accuracy and exposure should any of these staffing resources be lost. A more effective solution to this issue would be to leverage collection software that supports automation around these evaluations and calculations to minimize the amount of training staff would require while making the staff more efficient and consistent in executing this process.
Within Cogent we have incorporated a suite of tools designed to simplify and automate many aspects of the judgment entry process allowing a firm to quickly move along to the enforcement process. By state, a firm can create judgment entry formulas to assist in the process of calculating the balance of an account post judgment and identifying which components of the balance should be capitalized into principle and what needs to be tracked separately. The system will also calculate judgment expiration dates by state and using the Cogent standard workflow will automatically schedule a review for the renewal at the appropriate time.
We have found that these tools have helped firms increase the speed and accuracy of the judgment entry process. Ultimately, this leads to reaching the process of execution more quickly and contributes to an increase in client recoveries. There are certainly other challenges with the judgment entry process and other controls that can be put in place outside of automation in your collections software. We invite you to share some procedures your firm has implemented to improve the judgment entry process at your firm.