I’m not a lawyer, I am a judgment expert. This article is my opinion. If you ever need a strategy to use or legal advice, you should contact an attorney.
When you have a judgment, the debtor won’t pay you willingly. Most people do not want to think or read too much about a judgment. Most judgment owners only want an instant quote from someone who will purchase a judgment now.
The problem is, that’s not the way finding a quote for a judgment actually works, unless you sell your judgment for less than one cent on the dollar. Anyone who purchases judgments needs to spend money and time, and take some financial risks, to attempt to recover money from it.
In my article, “buyer” means an expert qualified to quote and estimate a judgment’s approximate value, which could be a judgment buyer, investor, collection lawyer, recovery specialist, or a collection company.
Only a qualified judgment buyer can estimate and quote a judgment’s real value, that is mostly an estimate of both risks, and what could be available from what the debtor owns, to repay a judgment.
To get a price quote for a cash up front purchase of your judgment, you need a copy of your judgment, and what is known about your debtor and their assets. When a debtor is unknown and/or has no assets, the worth of a judgment is approximately nothing.
One example of an unknown judgment debtor would be with a name of (e.g.) Bill Smith, who was served with a lawsuit at some transitory place, that could not be associated to anyone with the name of Bill Smith. An example of a judgment debtor without assets might be one who has successfully went bankrupt, or who has no attachable assets or income.
Assuming your judgment debtor is known and has some assets, your judgment has some value. On a cash up-front sale, the purchaser assumes all risks, so any price paid is always a small percentage of the nominal value of the judgment.
If one sells judgments, there always is paperwork which usually needs to get notarized. The paperwork includes both a contract and either a lawyer’s or an agency’s retainer form, or an assignment of judgment form. Before a buyer’s contract gets sent to you, they must approximate and calculate worth of a judgment, factoring in most unknown and known risks.
Most judgments have value, however a judgment’s worth is not insurable, not guaranteed, and is unknown, except for a short time after an estimate from qualified buyers.
Even if a judgment were guaranteed, they would never get sold cash up front at anything near their face value because of the time value of money. A hundred dollars now is way more valuable than $100 10 years later. Getting your tooth pulled 20 years later is a lot appealing than getting your tooth pulled today. A judgment pays over time, if it pays at all.
About eighty-five percent of a judgment’s value is primarily a prediction of what the judgment debtor can be convinced to pay from their available assets now, and 15% on what the debtor might be convinced to repay later. With today’s economy, the worth of a judgment depends eighty-five percent on “now”. Now passes quickly, and most futures change quickly.
The price you are quoted for a judgment somewhat depends on the location of your debtor, as that effects how the judgment may be recovered.
The value of a judgment doesn’t have anything to do with your buyer or you, so shopping your judgment isn’t important, or at least not as important as shopping for anything else. Shopping your judgment is much similar to shopping a hundred dollars bill. The price will stay near a hundred dollars, no matter what buyer you offer your $100 bill to.
One option is to send a judgment to 1 to five judgment buyers. Another option is to send the judgment to just one judgment broker. Sending your judgment to more than 5 buyers is a waste of their time and yours.