Collecting money from someone who owes you can be tough for various reasons. Collecting money from someone during a pandemic, well, that might weigh on you.
Litigation attorney Kayla Banzali gives you three reasons why taking steps to collect money sooner, rather than later, – even during a pandemic – will benefit all parties, especially you.
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Don’t Let Guilt Prevent You From Collecting Money You’re Owed
Since COVID-19 has started, there’s become a lot of guilt associated with collecting money from people. Since a lot of people are going through hard times, people feel bad trying to take them to court to get an amount that’s owed to them. But ultimately, there’s a lot of benefits with going to court and getting an amount owed reduced to a monetary judgment.
3 Benefits of Getting a Judgment Now
One: Prevent Future Issues
First, it prevents there from being a dispute in the future, because it’s already been litigated, it’s already been reduced to a judgment.
So that amount owed is going to stay a lot more solid than if you wait until years later, and then suddenly that person disputes the amount of money that’s owed to you.
Two: Collect Interest
Second, it allows for interest, in the event that you had a contract that didn’t have an interest rate provided.
You can’t then later decide, “Oh, well it’s been two years since you paid me, so I want 8% interest on that amount owed.” But once it’s a monetary judgment, it accumulates interest at a statutory interest rate of 8%.
Three: Offer a Grace Period Now & Collect Later
And third, it allows you to take collection action. Maybe because someone’s going through a hard time right now you don’t want to take those steps right away.
But, if you already have that monetary judgment, in the event that they don’t pay you back once they’re no longer going through a hard time, then you can quickly take those enforcement actions and get that money collected as quickly as possible, without having to wait to go through the court process at that later date.