Judgment recovery is a collections effort, which means to collect or enforce your judgment. Judgment buyers (might) buy your judgment. This article is my opinion, and not legal advice. I am a judgment broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.
Many people try to sell their judgment as if it was a valuable car. A judgment is only worth at the very most, whatever available judgment debtor assets subject to attachment. On a cash upfront sale, judgments are worth only what a buyer will actually pay for them. Most websites that claim to buy judgments, lie about how much they will pay, and buy only the very few judgments with wealthy debtors.
Most judgment owners assume their judgments will be worth something someday. However, if they try to sell them for cash upfront, they are usually shocked to learn that due diligence on their debtor is required. Also, any possible offer is very often just a few pennies on the dollar, because of the costs and uncertainty of judgment recovery.
On a cash upfront sale, the price (a percentage of the judgment’s face value) that a buyer will pay for your judgment depends only on your debtor’s situation. When considering making an offer to buy a judgment, buyers factor in the current and possible future available debtor assets, and the potential risks and costs of recovery.
In my job, I often hear “questions” such as this: “I have a $100K judgment that I’ve had for 5 years. For 5 years I have had 3 collection lawyers and a judgment enforcer try to collect it, but none of them had any success. My debtor is in his 70s and probably has assets somewhere, so how much will you pay me cash upfront for my judgment?” The problem is, such situations are known as “tough judgments”.
Judgment buyers only want easy judgments where the debtors have more available assets than is required to satisfy the judgment. I have seen one judgment sell for 37% of its face value cash upfront, because the debtor was very wealthy. However, the average judgment is tough, and sells for about 1-7% cash upfront.
I work with many judgment portfolio buyers; and when the debtors do not have any assets showing, they usually pay less than a penny on the dollar. Whenever the debtors have hidden their assets or have no obvious available assets showing, cash upfront offers to buy the judgments will be between nothing and a few pennies on the dollar.
Most judgments are weak because most debtors cannot repay them. An ideal judgment does not exist because the debtor would have paid or settled long before you needed to sue them. By the time you win your judgment, the odds of collecting it are reduced. If nobody can recover your judgment, then nobody will want to buy it either. The kind of judgments that buyers want are those that can be easily recovered.