I’m not an attorney, I am a Judgment Broker. This article is not legal advice, it is my opinion. If you want legal advice or a strategy to use, please contact an attorney.
With my long-term experience, I know the the cash up-front value of the majority of judgments is very limited. Almost every day, I discuss judgments to at least eleven judgment creditors, and exchange e-mails with around ten more.
Way too often, when I tell people their judgment is not worth much money up-front, they think I’m crazy.
It’s as if they are hearing the truth concerning their judgment, for the first time. Most judgment owners don’t believe the facts about the situation with their judgment.
One can find web sites which boast about buying judgments at “up to 55%”, that won’t pay even three cents per dollar on average judgments.
The old statistics one can find all over the web, assert that around 80% of judgments will never be.
I have worked to recover judgments for around ten years, and have been working as a judgment broker for three years. I have first-hand experience with several thousand judgments, and I know this:
These days, around 95% of judgments not repaid quickly, are never recovered, at least not for more than 10% of what is owed.
In my claim that 95% of judgments are not collected, I am not including judgments that have been dismissed or settled. Some reasons behind my ninety-five percent observation is:
1) The economic situation is really bad, and most people have far less assets these days compared to recent history.
Judgments are not cash, and only judgment debtors can repay judgments. When the judgment debtor is broke, not much can be done, and that judgment remains almost worthless.
2) Laws and courts are downsizing, becoming more expensive, and getting slower. Judgment enforcement is more expensive, slower, and sometimes impossible in certain states.
3) Debtors are much more likely to apply for bankruptcy now. Almost always, bankruptcy kills judgments.
4) Judgment enforcers and buyers of judgments are leaving the business faster than ever before.
5) Contingency lawyers, judgment enforcers, and buyers of judgments, have become super picky about what kinds of judgments they might consider.
When a debtor has lots of money, it is easier to to find a contingency enforcer, or sell a judgment. In recent times, now many debtors have even an average amount of assets available.
For 99% of judgments when the debtors own no or few assets; it seems that either few people tell judgment owners the truth, or judgment owners are consistently refusing to believe the truth.
The truth is, it is now almost impossible to sell a judgment for more than one to nine percent of the listed amount, depending on the judgment debtor.
A typical future-pay recovery fee is 50% when you do not risk or pay anything for a judgment recovery. If the debtor has substantial assets, or when you pay all expenses, one may pay a lower future-payment enforcement charge.
Most judgment buyer and auction companies have gone. The sole judgment trade/sell/buy site remaining, has few successful sales, as most judgment creditors price their average judgments way more than 5%, so nobody buys them.
It is a shame, that most judgment owners cannot accept the truth about the low cash up-front value of typical judgments. Many contact hundreds of judgment experts.
In my job, I’ve seen a pattern that repeats. For example, a judgment creditor called me a year ago with their $100,000 judgment, they wished to sell for $30,000 cash up-front.
I told them that no one will pay that high of a percentage, for any cash up front judgment sale. Also, that he will be far better off with a future-payment recovery, and a recovery specialist will pay him about of fifty percent of the amount that is possibly recovered.
When that judgment creditor heard that, he told me they will pay 15% to get the judgment enforced on a future-payment basis, and not even a penny more. I said to him nobody could help them, and good luck.
What happened during the following year, was I got a lead for a judgment from approximately 50 judgment experts, from the same exact creditor, who had persistently and aggressively shopped his judgment all over the nation.
About a year after that, the creditor called me again. He told me that he’d contacted 300 judgment experts over the previous year, attempting to locate a match with his unrealistic conditions.
He still had not found even one buyer or enforcer, for his unrealistic terms. Then he asked me did I knew any new buyers now, that would meet his terms. I said sorry, nobody will pay him $30K cash up front to buy his judgment.
The ironic part was, his debtor seemed to have several assets. The 100K judgment creditor, was not any nearer to recovering any money on his judgment; and he squandered so much time for himself and others.
Some people think that with a down economy, judgment buyers and enforcers will compete for their business. This is not reality, as the expense and difficulty of recovering judgments have drastically risen. Judgments are never commodity items ruled by supply and demand price rules.
Many judgment owners believe they can get a much better price by shopping their judgment. They are wrong. The reality is judgments are worth what a buyer will pay for the judgment based on the judgment debtor, not for what an alleged buyer brags they might pay “up to”.
A judgment sale price, or the percentage fee on a future-pay collection effort, does not have anything to do with the judgment owner’s needs or wishes. It usually doesn’t rely on the buyer or enforcer, and almost always depends entirely on the status of the debtor.
Imagine contacting 300 companies and people for a year, and never learning the problem. The problem is, the creditor did not facing a truth, that a judgment is never cash, and are usually not worth much up front.