Wednesday, August 29, 2012

Why Judgment Buyers Do Not Respond

During a good economy and an upward mobility trend, it wasn't difficult to sell a judgment for money upfront. Only debtors can repay judgments, so everything depends on the situation of your particular judgment debtors. When your judgment debtor does not have a bunch of available assets or wages showing, nobody will offer much. Also, nobody will pay more than a penny on the dollar with broke judgment debtors. When your judgment debtor is broke and is also old or sick, you probably couldn't even pay a buyer to take the judgment.

This article is my opinion and is not, legal advice. I'm a judgment broker, and not an attorney. When you ever need a strategy to use or legal advice, you should contact an attorney. Our economy by itself, has made judgments a lot harder to recover or sell. Even when the judgment debtor has money, if they are experts at hiding it, or moving it where it can't be reached by judgment owners; no buyer will offer much money upfront for your judgment.

Someone who buys a judgment has to recover money from the judgment, to just cover the cost of buying the judgment. In good economic times, people were much more likely to risk spending cash; to buy a judgment and then invest more time and money attempting to enforce it. The economic mess has discouraged judgment purchasing in 3 ways:

1) Like many people, many judgment purchasers have less money now than they used to. Most were hurt from purchasing judgments before, when our economy first went bad. Now, buyers are really picky with which judgments they can risk money to purchase. Most do not have enough available assets to pay (money upfront) what may be fair for large judgments with giant debtor assets.

2) Courts have increased their fees, and many have downsized, and certain have even shut down. Many courts now place a much lower priority on judgment enforcement proceedings or actions. Recovering judgments always relies on the courts.

3) Many debtors are currently broke, or at least more poor than they were before. The primary ways to enforce judgments are recording a lien on real estate, or levying/garnishing either bank accounts or wages. Without having liens on property with enough equity, or bank accounts/employment income to levy, judgment recovery is very hard.

If the debtor has no available assets, it will be difficult to find anyone to attempt to recover the judgment on a contingency basis. Also, it will be almost impossible to find a judgment purchaser at more than a penny on the dollar.

If the judgment debtor owns assets, it's important to identify them. "Joe used to own a bunch of property and kept them in some friend's name" won't interest a judgment purchaser. Three things which might interest a judgment buyer are:

1) Exactly identified assets the judgment debtor now owns, as an example, expensive vehicles and property. Note that if property has a lien against it or is leased, it most often can't be used to repay your judgment.

2) Clearly specified current income of your judgment debtor, for example where they work. Note that when there is a prior wage levy in place, it can prevent a new judgment owner from attaching that income to repay your judgment.

3) Exactly identified potential future assets of the debtor, as an example if they may soon inherit real estate.

The more assets your judgment debtors has, the less likely it is that you would have sued the debtor. Also, the more likely it is that they would have already repaid you. Lastly, more judgment debtor assets increase the chances that you would be able to sell your judgment; and the more money you are likely to get for the judgment on a future pay contingency basis.

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