Happy Holidays to all my peers in the Accounts Receivable Management (ARM) industry! With the tax season upon us, it is holiday season for businesses of every kind who will be marketing at the discretionary dollars consumers will be receiving from their 2015 tax refunds. Whether it is a furniture store or car dealership, companies are already bombarding consumers with incentives to cash in their tax refund while the getting is good. ARM companies are no different as we make tax season settlement offers, however with the billions of dollars of dormant judgement inventory in the market today shifting to garnishments may prove to be a more successful tax season strategy.
When you consider the lifecycle of a file, it is typically in the pre-judgment status for a very short period of time. On average, it takes 12 months from the placement date of a new file to reach a judgment status and that is being conservative. When you then take into account states like Arizona or Pennsylvania that have the shortest statue on judgments (at 4 years) compared to states like Illinois or Alabama that have the longest statue on judgments (20 years), a file is in the pre-judgment status for 5-25% of its lifecycle. Given how quickly a file progresses to judgment status, every law firm will have a surplus of dormant judgements to target this tax season. Read More