Litigation Prevention is Paramount
A judgment collection attorneys law firm such as ours can be a great asset to a person or business who is owed money, in helping to collect your judgment. I have had my collection law firm here in Downtown Los Angeles for some time now, and I enjoy helping my clients collect judgments. But, as much help as we can offer, anyone who has ever been ripped off knows that the real “win” is not to get ripped off in the first place, and to avoid the need to for the collection process and judgment enforcement as much as possible. Enforcing a judgment can be beautiful and satisfying. But doing good business means making sure it never comes to that, if you possibly can.
Doing business , especially nowadays, is tricky business. You have a contract with someone you don’t know that well, maybe you never even met them and only know them by email (common) and you now find yourself lending them money, shipping them goods, performing valuable services, whatever the case may be – and hoping against against hope that they decide to honor the deal. Oddly enough, that’s how we do things, and the internet has only made that more prevalent. We talk to people for a few minutes on the phone, and next thing you know, we are in business. You would not believe how many calls I get that start out with “I gave $50k to someone I found on the internet…”Sure, you had a contract, but who cares? The best you can get if that contract gets breached is a judgment against the person (or defunct company) that breached it, and guess what? It can be really hard to enforce a judgment- take it from me. Judgment enforcement(and litigation in general) should be viewed as the last resort, when all else has failed and all other safeguards have not protected you.
So that’s the gloom and doom of the situation- the world is a dangerous place- you probably knew that. So now, what do you do to protect yourself? Believe it or not, there are a few VERY simple, common sense things you can do to save yourself a world of problems, and if you do these things, you will significantly reduce your risk of ever needing to enforce a judgment.
1. Online reputation search of the person or company you are dealing with
If you didn’t get your potential business referral off the internet, the internet is a great place to check them for reviews (e.g. Yelp, Better Business Bureau) rip-off reports (there are sites dedicated to reporting people/companies who are rip-offs (e.g. Rip-Off Report). Other social media sites like LinkedIn and Facebook and Instagram will perhaps give you a bit of personal insight into who you are doing business with. If the real estate investor you are thinking of investing with is on Facebook getting drunk at strip clubs all the time, maybe you should wait till the next deal comes along. Ditto if he is on the ripoff report.
If all this sounds obvious to you, then good for you- you are more savvy than many others- I have received many calls from people who had clearly never even typed their debtors name into google before going into business with them, because if they had they’d have seen that the company had 37 one star reviews on yelp and 25 rip-off reports and never would have gotten involved in the first place.
There are many different review sites and forums where things get post and everything should be taken with the requisite “grain of salt” just because your future money manager loves to gamble big in vegas doesn’t always mean he’s no good by any stretch- but that is information you should have available to put into the hopper for the decision making process. – As a general rule, I look through the first 3-4 pages of search results at least, when I search for a person or entity, to see what’s what.
2. Search Public Records on the individual or company
The internet and social media are a great tool but not the only one nor the most reliable one. Public records are quite useful and can reveal the existence of things like lawsuits, bankruptcies, judgments/liens, property ownership, defaults/foreclosures, etc.
Every County has a superior court, and many have websites where you can input the name of a person or company, and find instantly, all the lawsuits they are involved in. Federal lawsuits and bankruptcies can be found on PACER, the government website for all federal courts, which can be found HERE.
Every county also has a county recorder. And many recorders also have online search features, where you can input the name of the person or business you are searching for, and come up with properties they own, mortgages they have, judgment liens and tax liens filed against them, and all sorts of other goodies.
Some counties only allow these searches to people who physically go to the recorder or the Courthouse, or else charge money for the searches. If for any reason you cannot do such searches yourself, you should find a reasonably priced Private Investigator to conduct it for you. A couple hundred dollars could save you a couple hundred thousand!
3. Credit Reports, Identification, References- Don’t be afraid to ask for them!
Nothing is as telling of someones propensity to not pay their debts, as history of nonpayment of debts. You can get this from a credit report. You will generally need CONSENT from the person you are running a report on, and you should almost never run a credit report without such consent. (Investigators have access to these and may run them for you if you provide signed consent from the person) Also don’t be afraid to ask for something simple like a drivers license or passport to make sure you are talking to the person that you think you are talking to.
We live in times where laws of civility and “being polite” take precedence over common sense, where we’d sooner die than offend someone’s sensibilities or hurt their feelings. Don’t fall into this trap. This trap is a scammers greatest weapon against his or her victims– If someone wants money or any sort of help at all from a bank, they need a credit report and a driver license. If someone wants money from you, why should it be so different?
These are some basic ways to get some basic information about those you would do business with, to evaluate if its a good idea. In the next entry, I will tell you how to process and use the information, and what sort of red-flags – some obvious some not so obvious- you should be looking for.