I am not a lawyer, I am a Judgment Broker. This article is my opinion, and is not legal advice. If you need legal advice, please contact a lawyer.
Through vast experience, I know the cash up-front value of most judgments is very small. Almost every day, I talk with at least ten judgment owners, and trade emails with at least ten more.
Far too often, when I tell people their judgment is not worth a lot of cash up-front, they think I am wrong.
It is as if they are listening to the truth about their judgment, for the first time in their life. Many judgment owners do not believe the reality about their judgment situation.
There are web sites that brag about buying judgments for "up to 50%", that will not pay even three cents on the dollar for average judgments.
The old statistics found all over the web, assert that about 80% of judgments are never recovered.
I have been enforcing judgments for a decade, and have been a judgment broker for three years. I have first-hand experience with thousands of judgments, and I know this:
These days, about 95% of judgments not paid quickly, are never recovered, at least not for more than 10% of what is owed.
When I assert that 95% of judgments are not recovered, I am not including judgments that were settled or dismissed. The reasons for my 95% estimation is:
1) The economy is awful, and most debtors have far less money now than in recent history.
A judgment is not cash, and only the judgment debtor can repay a judgment. When the debtor is poor, not much can be done, and the judgment remains almost worthless.
2) Laws and courts are changing, becoming more expensive, and getting slower. Judgment recovery is more expensive, slower, and occasionally impossible in some courts.
3) Debtors are much more likely to file for bankruptcy protection these days. Almost always, bankruptcy kills judgments.
4) Judgment enforcers and buyers are going out of business faster than ever before.
5) Enforcers, contingency lawyers, and judgment buyers, have become very picky about which judgments they will consider.
When a judgment debtor has lots of available assets, it is easy to sell a judgment, or to find a contingency enforcer. These days, very few debtors have even an average amount of available assets.
For the 99% of judgments where the debtors have few or no assets; it seems that either few people tell judgment owners the truth, or judgment owners are consistently refusing to believe the truth.
The reality is, it is now almost impossible to sell judgments for more than 1-9% of their face value, depending on the judgment debtor.
The average future-pay recovery charge averages 50% when you do not pay or risk anything for a judgment recovery. When the debtor has substantial assets, or if you pay all expenses, you may find a lower future-pay recovery charge.
Most judgment buying and auction sites are now out of business. The one judgment buy/sell/trade site left, has few successful transactions, because most judgment owners price their average judgments far above 5%, so nobody buys them.
Amazingly, many creditors cannot accept the reality about the low cash upfront value of most judgments. Some contact hundreds of judgment experts.
Over the years, I have observed a repeating pattern. For example, a judgment owner called me a year ago with their $100,000 judgment, they wanted to sell for $30,000 cash up-front.
I explained that nobody pays that much of a percentage, for a cash up-front sale. Also, that they would be far better off with a future-payment recovery, where a recovery expert would pay them an average of 50% of what might get recovered.
When the creditor heard that, they said they would pay 15% to get their judgment enforced on a future-pay basis, and not a penny more. I told him nobody can help them, and good luck.
What happened during the following year, was that I received leads from about 50 judgment experts, from that exact same creditor, who had persistently and aggressively shopped their judgment all over the nation.
About a year later, the creditor called me again. He explained that he had contacted 300 judgment experts during the previous year, trying to find a match for his requirements.
He still had not found even one buyer or enforcer, with his unrealistic terms. He then asked me if I had any new buyers now, who would pay his price. I said no, nobody will pay him $30K cash up front for his judgment.
An irony is, his debtor seemed to have some assets. The 100K judgment owner, remained no closer to getting any money for his judgment; and he wasted so much time for himself and others.
Some people think that with the economy down, judgment enforcers and buyers will compete for their business. This is not reality, because the expense and difficulty of recovering judgments has dramatically increased. Judgments are not commodity items subject to supply and demand price rules.
Many people think they can get a much better price by shopping their judgment. They are wrong. The truth is a judgment is only worth what someone will pay for it based on the debtor, not for what someone brags they will pay "up to".
A judgment sale price, or the percentage fee for a future recovery effort, does not depend on the creditor's needs or wishes. It usually does not depend on the enforcer or buyer, and almost always depends on the situation of the debtor.
Imagine contacting 300 people and companies over a year, and not learning the problem. The problem is, the judgment owner was not accepting a reality, that judgments are not cash, and are usually not worth much cash upfront.
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