subject: How Judgment Buyers Price Judgments [print this page] Judgment purchasers prefer to buy judgments which seem easy to recover. The ideal judgment to buy is one that is against a wealthy company or person with no other judgments or debts; owning lots of assets such as expensive cars, properties, boats, or planes, with no prior liens or loans on them. Alas, very few debtor circumstances are like this.
Before you buy a judgment, you should learn a lot about the debtor's situation, and check they haven't filed for bankruptcy. This article is my opinion and is not, legal advice. I'm a judgment referral expert, and not an attorney. When you ever need a strategy to use or legal advice, please contact an attorney.
There's several reasons to buy judgments with a single one-time cash upfront sale. Cash up-front judgment sales offer several advantages, including not having to split any potential collections made, or needing to listen to original judgment creditors. You also get the freedom to earn a quick profit; and move on when you choose to, not needing to deal with original judgment creditors.
One more big advantage of cash upfront judgment sales is they're accepted in nearly all courts. In some states, courts, and with certain judges; assignees of record recovering judgments with future-pay contracts to buy the judgments, aren't allowed post-judgment recovery actions in courts.
One of the best reasons to buy a judgment, is to try to quickly settle the debt with the debtor. You might attempt to politely contact the judgment debtor, and suggest settling the judgment debt in a way that saves them a lot of money, yet leaves you a nice profit margin. Your goal is to earn a reasonable profit quickly, instead of starting the usually expensive and long recovery process to try to collect the judgment. Other reasons to purchase a judgment are to later attempt to resell or enforce the judgment, without needing a debtor's assistance.
The best way to buy judgments is to purchase the judgment cheap enough to insure that you have a decent chance to make a profit, either by settling or enforcing the judgment. The problem is that many judgment owners dramatically over-value the real market value of their judgments.
Experienced judgment purchasers pay around 1% to 3% for average judgments, when the judgment debtor does not seem to have any obvious way to repay even a portion of your judgment. When debtors have assets, sometimes judgment purchasers will pay more. The fact that a bankruptcy filing can quickly make most judgments worthless, is the biggest reason no one pays big money upfront for judgments.
When you purchase a judgment, you must have the original judgment creditor notarize the judgment assignment to you; and sign your purchase contract, to purchase their judgment. You should not pay too much, until the judgment gets assigned to you, and the assignment gets recorded in the proper court.
When your debtor won't settle, then you could start the usually difficult and expensive path to attempt to enforce your judgment. If you recover a judgment that you purchased, keep in mind that collecting every dime is not as important as locking in a fast profit, and thinking about buying your next judgment.
When you get paid, you need to satisfy the judgment with a notarized satisfaction of judgment endorsed by the court, and mail the original copy of the judgment satisfaction to the former judgment debtor. Keep a copy of the court-endorsed satisfaction of judgment for your records.
by: Mark Shapiro
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