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However, one way or another, it costs more time and money to recover judgments. My articles are my opinions, 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. This article highlights expenses, including lesser-known expenses, that creditors may face when trying to get their judgments recovered, under six different scenarios.
1) When you recover your own judgment: The pros are that you keep full control of everything, and you do not have to split what might be recovered. When someone else recovers your judgment, you must share an average of 50% of what gets recovered\. If you recover your own judgment, you set the priorities, and keep all possible recoveries. The cons are you gamble that any time and money you invest, will pay off. Judgments are not guaranteed, and any time or money spent trying to recover them can easily go down the drain.
2) When you sell your judgment for cash upfront: The pros are you get some cash, and the only expense is $10 to notarize an assignment of judgment to the buyer. The con is average judgments (without a judgment debtor having massive available assets) sell for 1 to 6% of their face value, and you can waste your time trying to prove otherwise.
3) When you assign your judgment to a judgment enforcer: The pro is they take over the hassle and financial risk of recovering your judgment. The cons are you must assign your judgment to them, and pay about $10 for a notarization of that assignment, and share in whatever is recovered over time. Some creditors do not like to assign their judgments, because of the risks of depending on any one person. Some judgment enforcers charge a fee to get started, and/or ask judgment owners to share some costs, and/or have contracts that charge a fee if the judgment is vacated, or the debtor goes bankrupt, etc.
After you assign your judgment to a judgment enforcer, it often takes a long time for any potential progress to be made. Often, it is a case of your judgment debtor having few available assets. However, you might eventually feel the enforcer is not doing enough, and you may want your judgment back. The judgment enforcer might insist you first reimburse them for their court-approved costs. If the judgment enforcer disappears or does not respond, you must then pay for a court motion and hearing, to try to undo the assignment of your judgment to them.
4) When you choose a collection agency to recover your judgment: The pros are you do not usually have to assign your judgment to them, because they work on your behalf. They spend all the time and usually all the money required to attempt to recover your judgment. The cons are that most collection agencies do not specialize in recovering judgments. Those that collect judgments keep a share of what is recovered, and some also charge a fee to get started.
Some collection agencies also charge extra if they have to litigate to recover your judgment, because they have to pay their lawyers. This can happen when the collection agency has to domesticate a judgment to another state, undo fraudulent transfers, etc. Usually, clients are notified before such extra costs are incurred, so if the client does not agree, usually the collection agency will return their judgment. This is almost always an optional choice for the creditor, and creditors should not, and rarely do, get unexpected bills from collection agencies. The best collection agencies use lawyers to recover judgments, so creditors never have to pay any hourly attorney charges.
There is a difference, when the collection agency is owned by attorney(s) or not. When a collection agency is attorney-owned, in many states, when attorneys represent clients on a contingency basis, the law is their clients must pay most or all court filing fees, and certain other fees. When a collection agency is not owned by attorney(s), the agency often pays most court filing fees.
Sometimes, when a collection agency brings up the topic of their client paying a litigation or filing fee (e.g.) to domesticate a judgment, the creditor will not want to pay. One solution is for the creditor to assign their judgment to the collection agency. The reason assigning a judgment to the collection agency can work, is because after the judgment is assigned to the agency, they are no longer representing the creditor, so the agency can pay the court filing fees.
5) When you choose a non-contingency lawyer to recover your judgment: The pros are you get some control of the timing and plans to recover your judgment. The cons are you must pay them a retainer and by the hour, and all expenses, without any guarantee of success.
6) When you choose a contingency lawyer to recover your judgment: The pros are you do not have to pay for the lawyer's time, and they usually advance some of the expenses, except where laws make the creditors pay court filing fees. Also, they usually get the best results. The cons are they usually only accept certain judgments, and may sometimes first place their priorities on clients that pay by the hour. If you later want your judgment back, you might owe the lawyer some money because of their quantum merit contract clauses. Such clauses mean a contingency lawyer can get paid for the work they did, if you choose to fire them
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