Everyone wants the most cash for their judgment right now. Some ask for the impossible, for example 50% cash up front, or a future-pay contingency recovery charge of 10% to enforce their judgment. In this article, I discuss how to really get the highest price for your judgment, as fast as reality allows.
There are only two ways to sell a judgment – either for a portion of the listed value of the judgment, paid after it is recovered from the debtor, or for much less cash up-front. (See our Why Cash Up Front Prices Are Way Down article.)
Either way, when you sell your judgment, you are done with it, you will not have to spend any more time or money trying to recover it. You can then move onto more fruitful ways to spend your time and money.
A judgment is worth, at most, most of what a debtor can be convinced, persuaded, or forced to pay. If the judgment debtor has nothing the judgment is worth almost nothing cash upfront, and you are better off with a future-pay judgment recovery specialist. Even then, the judgment might be worth nothing, or it could be worth something in the future.
I am often asked/told, “I want the most money I can get right now, so what is the fastest way to get all my money?”. The reality is that nobody will pay you more than your judgment is worth, because nobody can predict with certainty what the debtor will do. When the value is unknown, nobody will take the risk of paying you much cash up-front for your judgment.
The fastest way to get paid is to sell your judgment very cheaply. To get 1-3 percent of the face value, you can do a web search and find a buyer. Better yet, list your judgment with a judgment broker, and you may get much more money, more quickly – unless your debtor is old, poor, or bankrupt.
The second fastest way to sell a judgment, is to list your judgment elsewhere on the web. However, even this will not get you more money than your judgment debtor’s available assets will support.
The third, and slowest way to sell your judgment is to shop your judgment around. Even this will not help you to get paid more, or be paid faster. Before there were judgment brokers, shopping was the only way to sell your judgment.
To shop, you send your judgment (and debtor information) to many potential judgment buyers, and spend time talking and trading emails with each one.
After a few weeks of interviewing, you determine which buyer’s purchase offer seems the best. Then you can compare any offers, and perhaps check again with those that previously said yes, to see if they will match your best found price. If it does not work out, start again. Rinse, Lather, Repeat.
The web offers us a way to spend countless hours shopping. Shopping your judgment wastes a lot of time for everyone, and almost never gets you paid faster. Even now, too many people waste time shopping.
A judgment broker, for free, does the shopping for you. Instead of wasting time, you send your information just once, and let the broker work to find you the buyer offering the best price, or the right enforcer for the best chance of recovering some of your judgment money.
Judgments are not fungible, and they can be compared to used cars. Most used cars depreciate quickly in value, and are sold for a tiny fraction of their original sticker price.
Some kinds of cars can become collector models, that if well-maintained, can be sold for close-to, and sometimes more than their original sticker price. In some ways, judgments are bought and sold like used cars.
The way judgments are sold for the highest price, is similar to how used cars would be sold, if they were sold on the web.
The web is now the most popular way to advertise something. As with cars, with judgments, its location, location, location. Most people would not buy a car 3,000 miles away. Also, the condition of the car matters a lot. With judgments, the debtor’s situation matters a lot.
Let’s say you have a 2015 Santa Clara County, California brand judgment, one owner, sticker price was 20K, debtor is now in Allegheny County, PA. No maintenance was done (the judgment was never domesticated to PA, nothing is currently known about debtor).
Asking price: $10K. There is very little chance of getting 10K cash up-front. Your only chance of getting even 5K is if the judgment is in “cherry condition”, and you advertised it to a large group of pre-qualified buyers who are specifically looking for PA judgments.
What if your judgment is “cherried-out”? What if your judgment was well maintained (renewed, domesticated, judgment debtor well known, your debtor has a lot of assets, proof of service is good, and your debtor is young)?
Ideal conditions are rare, and if your California sticker price 20K judgment was already domesticated to PA, it would be easier to sell for more money.
You can sometimes sell an ideal judgment for cash up-front. Even with ideal conditions, nobody pays sticker price for a judgment because a judgment is not cash.
If your judgment debtor is wealthy, and has lots of assets showing, for example, owns four houses outright and has a great job, maybe you will get $3K to $9K for that 20K judgment.
High prices are for ideal conditions – most often cash up-front judgment sales are for small prices. How much money you can get for selling a judgment for cash up-front, depends on your judgment situation, and not how many qualified buyers see that your judgment is available for sale.
Time, and the future value of money are related. If you can wait, you might get $12-$24K for the judgment in this example, on a future-pay contingency recovery basis. If the debtor is rich, you might get it quickly. When the debtor is rich, cash up front and future-payments are not very different, either way, you get paid quick.
Shopping your judgment is now old school and obsolete. Let a judgment broker that knows the best judgment experts, do the shopping for you, for free, to find the right judgment buyer or enforcer, to get you the most real money for your judgment.