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Screening Judgments

When deciding whether to take a creditor's judgment, what factors should you consider? If you look up only the judgment debtor with very basic searches, it may not include a reliable asset search. With permissible purpose, can you simply order credit reports? That can become very expensive.

This article is my opinion, and not legal advice. I am a judgment referral expert, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.

All judgments should be checked out thoroughly. This means checking that the judgment itself is valid, that the debtor might have some assets, and the original creditor themselves are reasonable.

While there are inexpensive options to screen judgment debtors using public records, screening a judgment or a judgment debtor is not the same as finding leviable assets. Proper screening includes looking at the debtor, how they live, what they own, where they live, and what kind of lifestyle they have.

These are six considerations to think about, before deciding to take a creditor's Assignment of Judgment:

1) Age: Too young may be a problem, however too old is more of a problem, because the laws allow for many exemptions and social interests and protections for old folks.

2) The debtor's residence: Owns their house (good), rents a dump (bad). Moves a lot (bad) or lives outside your area of operation (bad). If they live in an old mobile home with an old pickup truck up on blocks in front and a pit bull dog chained up in their yard, that is not a good sign.

3) Existing liens - IRS tax or child support (Bad News). UCC or minor tax liens (Perhaps bad news. Be careful).

4) Existing judgments - It is bad news if the judgment debtor owes lots of other judgments, especially big ones. If the debtor has a lot of tax lien judgments against them, that is extra bad news

5) If your debtor is married, only in a Community Property State; their spouse may be another potential target to try to recover from, although additional paperwork may be required.

6) Is the judgment the kind you want to work on? Many recovery experts avoid family law judgments, and in some places consumer debts are often problematic. Many enforcers avoid medical-related judgments and unlawful detainer judgments.

Some judgment debtors are both very rich and very clever. Consider the all too common cases of a (e.g.) half million dollar judgment on a swindler who is about to get out of prison, who probably stashed his stolen loot in a foreign country? Do you have the connections, and the money and the time, to deal with such a judgment situation?


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