In the world of litigation, securing a judgment is a significant achievement, but the real challenge lies in the often elusive task of collecting on those judgments. A thought-provoking article from the American Bar Association Journal delves into the heart of the matter with a headline that speaks volumes: “Why do 80 percent of judgments remain uncollected?”
The Enormous Unclaimed Assets: A Staggering Reality
The article kicks off with a staggering statistic that should give anyone in the legal industry pause—over $200 billion in assets from uncollected judgments in the last decade alone. This revelation stems from a conference attended many years ago, highlighting the pervasive issue of judgments issued by the court but left uncollected.
Insights from a Former Law Enforcement Agent Turned Asset Tracer
Authored by a former law enforcement agent turned asset tracer, the article provides valuable insights into the complexities of collecting on judgments. The author, drawing on personal experience, sheds light on the processes of obtaining judgments and conducting financial forensic research.
The Stark Realization: Why the 80% Remain Unenforced
Early in the author’s foray into asset tracing, a startling realization emerged—80% of civil money judgments go unenforced. This persistence of the percentage over the years raises a critical question: why do victims of fraud continue to be unable to recover their rightfully awarded money?
Unraveling the Challenges in Enforcing Judgments
The article dissects the challenges and reasons behind the staggering statistic:
1. Stigma in the Legal Industry
A prevailing belief within the legal industry is that attorneys handling such cases are considered lowlifes. This stigma may contribute to a lack of enthusiasm for pursuing and enforcing judgments.
2. Incompetence vs. Lack of Initiative
While incompetence is cited as a reason, the author argues that lack of initiative is a more common obstacle. Plaintiffs and creditors may hesitate to move forward due to perceived risks or potential costs.
3. Letting Things Slide
A common pitfall is the lack of follow-up. When defendants fail to comply with document requests or depositions, some plaintiffs allow these lapses without adequate follow-up, missing opportunities for recovery.
The Key to Successful Asset Recovery: Follow-Up and Analysis
The author emphasizes the significance of proper follow-up and analysis. Successful recovery efforts hinge on meticulous follow-up, ensuring that every avenue is explored to compel compliance from the judgment debtor.
The Role of Legal Education: A Glaring Gap
To shed light on the root of the issue, the author contacted the top 50 law schools in the country. Shockingly, only three of them cover judgment enforcement in their curriculum. This highlights a significant gap in legal education, where the emphasis is not placed on teaching students how to enforce judgments effectively.
The Right Path to Asset Recovery: A 50-Year Perspective
With five decades of experience, the author offers valuable guidance on the right path to successful asset recovery. Notably, neither depositions nor entire interrogatories should be used until at least 80% of the questions have been answered and documented in advance.
Finding and Following the Money: A Strategic Approach
The article concludes with a crucial strategy for successful asset recovery—finding and following the money. It emphasizes the importance of obtaining historical documents, closing statements, tax returns, and a comprehensive trail of assets to uncover the debtor’s financial landscape.
Recovering What Is Rightfully Yours
In a succinct and well-articulated manner, the article lays bare the challenges and solutions in collecting on judgments. The overarching message is clear: winning a lawsuit is not enough; the true victory lies in recovering what is rightfully yours. Unfortunately, many plaintiffs and creditors may miss out on this opportunity without undertaking the essential tasks outlined in this insightful article.