I am the nation’s only Judgment Broker, and I am not a lawyer. My articles are my opinion, and not legal advice. If you ever need any legal advice or a strategy to use, please contact a lawyer.

When people first win their judgment, they are often very confident that their judgment can easily be sold for big bucks, or will quickly be collected in full. That confidence usually fades fast when they face the realities that make judgment recovery difficult. For the debtor, settling a judgment saves them money and hassles, and gives them peace of mind. Settling can even be a win for the creditor.

The main reason for a judgment creditor to settle a judgment is when they are convinced that they are not likely to (within a reasonable time) recover most, or the entire amount due. For some creditors, it takes a long time to be convinced of this, after they get frustrated spending a lot of money and time attempting to recover their judgment. Seven popular reasons to settle a judgment include:

1) You cannot locate enough, or any, of your judgment debtor’s available assets. Due to laws, many debtor assets (e.g., social security, disability, pensions, tools used in the business of the judgment debtor, etc.), are off limits to judgment creditors.

2) There does not seem to be any way the debtor can or will, be able to significantly repay the judgment.

3) You would rather get paid some money now, than keep spending money and time, and gambling on perhaps being paid something in the future.

4) Recovering the judgment might push your debtor into bankruptcy. For example; if the judgment debtor recently got a chunk of money, and other than that, they are not doing well at all. You know it would take many years, with a risk of them going bankrupt, to possibly recover in the future, so you decide to settle now.

5) There is a legal flaw in the judgment (e.g., the judgment debtor’s name is not spelled correctly), that could make the judgment difficult to recover. Or, the judgment will expire soon. You might try to settle, before the flaw is discovered by the judgment debtor.

6) To avoid the expenses and hassles of recovering a judgment. Most judgments sell for less than 5% on the dollar on a cash up-front basis. Pure (future payment) contingency future-payment recovery specialists usually charge 50% on average judgments. It costs time and money to recover a judgment, so settling can make sense.

7) You feel altruistic and want to try to put this behind you, and perhaps even want to help your judgment debtor, by settling.

If you think it would be advantageous to settle with your judgment debtor, go for it. Some debtors do not pay after settlements, so make sure your debtor proves to you that they have more than enough sufficient assets to settle with you. Promises are a dime a dozen, cash is king