Civil litigation has its own unique terminology outsiders are not familiar with. If you have ever been involved in a civil case, you might be familiar with some of the terms. Are you familiar with the Agreement for Assignment? It is a term associated with judgement enforcement when a judgement creditor wants to turn collection over to a third party.
Civil courts do not return guilty or not guilty verdicts like criminal courts. Instead, they render judgements. A civil judgement is a legal recognition of some sort of debt, financial or otherwise. Judgements can also contain certain types of orders from the court. A cease-and-desist order compelling a defendant to stop doing something is a good example.
When a judgement involves financial compensation, the court’s decision establishes a legal debt which can be treated as an asset. That’s where the Agreement for Assignment comes into play.
Someone Has to Collect
The interesting thing about civil litigation is that courts limit their involvement in enforcing the judgements they render. Yet someone needs to collect when a judgement results in a monetary award. That someone is not the court. It is the party that won the case, thereafter known as the ‘judgement creditor’.
A judgement creditor can attempt to collect on its own by establishing a payment plan with the debtor. A lump sum payment is another option if the debtor is willing. There are obviously other options as well.
Some judgement creditors enlist their attorneys to handle collection. Because their attorneys work on their behalf, nothing changes in terms of the judgement’s legal status. But what if a creditor hires a collection agency specialising in judgements, like Judgement Collectors? At that point, judgement collection is a matter of assignment.
Assigning the Debt to a Third-Party
A creditor enlisting Judgement Collectors’ services would retain ownership of the judgement as an asset. Yet the creditor must give the collection agency authority to collect on its behalf. Without that authority, the collection agency is limited in what it can do. How is the authority granted? Through the Agreement of Assignment.
An Agreement of Assignment is a legal document completed by the collection agency and offered to the creditor for signature. The document gives the agency the legal right to collect on behalf of the creditor. That document is filed with a court of origin, which is to say the court that originally rendered the judgement. Once filed, the agency can proceed with its collection efforts.
Why Its Necessary
An Agreement of Assignment is necessary in most states for a couple of reasons. By the way, “most” states does not mean all. States regulate judgement enforcement according to their own statutes. They don’t all do things the same way.
As for why the Agreement of Assignment is necessary, it starts with the fact that judgements are considered assets under the law. A judgement is owned by the creditor. Because it is not owned by the collection agency, an agency’s collection options would be limited without the Agreement.
More importantly, judgements give creditors access to legal tools including garnishment and property seizure. The ability to utilize those tools must be transferred to the collection agency in some way, shape, or form. This is accomplished through the Agreement of Assignment.
In a nutshell, the Agreement of Assignment legally brings a collection agency on board to work on behalf of a judgement creditor. Completing and filing the paperwork is pretty much a formality. In the states where Agreements of Assignment are utilized, they are no big deal from an implementation standpoint.