Can a Collection Agency Change a Judgment?

A collection agency has no legal standing to change a judgment that has been issued by a court on behalf of a creditor. The creditor is the legal holder of the judgment, not the collection agency. However, if authorized by its principal the creditor, a collection agent may accept less than the full dollar amount of the judgment against the debtor in full satisfaction of the outstanding judgment.

Identification

When a court issues a judgment on its docket, it signifies that a plaintiff has prevailed in his civil action against a defendant. The entry of judgment is for the full amount of damages awarded. This amount would include the default balance due plus any accrued interest on the account. In the context of collection activity, since the creditor is the party who filed suit to recover a balance due from the debtor, the judgment is entered on behalf of the creditor, not the collection agency. Once judgment is issued, the plaintiff becomes a judgment creditor and the defendant, the judgment debtor.

Execution on the Judgment

In most states, before a judgment creditor can commence post-judgment procedures authorized by law to enforce payment of the judgment, he must first obtain an Execution. An Execution is a legal document that bears the seal of the court and signifies that the judgment creditor is entitled to collect the dollar amount stated therein from the judgment debtor. In most jurisdictions, there is a statutory rate of interest that accrues on a judgment balance until it is paid in full. No other charges or costs can be added to the Execution once the court has issued it.

Principal/Agent

At law, the authority of the agent can never exceed that granted to the principal. After the judgment, a creditor cannot change the judgment once issued.

Considerations

Once issued by a court, a collection agency has no legal authority to unilaterally change a judgment. As noted above, a creditor may decide to accept a lump sum in a dollar amount that is less than the full amount that is stated on the Execution. In consideration for the lump sum amount, the creditor would return the Execution to the court as marked "Paid, or Satisfied in Full." But, the decision to accept less than the full judgment amount is one that is made by the creditor, not the collection agency.