I am not a lawyer, I am a judgment expert. This article is my opinion, and not legal advice. If you ever need any legal advice, please contact a lawyer.
The two biggest problems with judgments, are that most judgments are not strong; and some judgment enforcers and buyers are not strong. One should be careful when selecting the right recovery option for their particular judgment.
These are some factors that may indicate a strong judgment:
1) Contested, where the judgment debtor showed up in court. Default judgments are weaker, as our legal system gives breaks to default judgment debtors. For example, the laws make default judgments harder to domesticate into some states, and default judgments are subject to motions to vacate.
2) The right size. Judgments less than about $5,000 are not as interesting to judgment enforcers, and interest very few contingency collection lawyers.
3) Have “good” debtors. It is often difficult to recover judgments on old debtors, due to the laws that protect the income and assets of older people.
It is usually difficult to recover judgments on poor debtors, because you cannot squeeze water out of a rock, and bankruptcy protection is cheap to apply for. It is very difficult to recover a judgment on a failed judgment debtor company.
When you pick a judgment enforcer or buyer, the issues are their qualities, and how suited they are to your specific judgment debtor, because only your judgment debtor’s assets can repay your judgment.
These are some factors that can show relative strength in a judgment enforcer or buyer (that may be a person, an attorney, or a collection agency):
1) Has an ample cash reserve. If a judgment enforcer runs low on cash, they are less likely to be able to aggressively and persistently recover the judgment debtor’s assets. The number one reason judgment enforcers leave the business, is when they run out of money.
2) Has the experience, and/or the attitude to succeed.
3) Knows their limitations, and does not take judgments they cannot enforce. One example is enforcers who take judgments nationwide, without having the resources or contacts to get them enforced.
4) Accountable, reliable, and responsive. Some enforcers (and many small businesses) do not take emails and voice mails seriously enough. Some enforcers go out of business, and then fail to assign judgments back to the original judgment creditors, which is one of the worst business decisions they could make.
5) Not a crook or a flake. Be very careful when “enforcers” want to charge you cash up-front, unless there is a very good reason that you agree to, for example, to domesticate your judgment to another state.
6) How long they have been in business, although nothing and no one lasts forever.
7) Not always useful, however, what organizations, educational groups, and judgment forums; they are current and/or long term members of.
8) Whether they were referred to you by a judgment broker, who knows the performance of many enforcers and buyers. A judgment broker actively screens out flakes, and does not refer judgment owners to enforcers or buyers who do not respond.
Can you bypass the issue of the strength of an enforcer, by selling your judgment for cash up-front? Not entirely, because there are some flaky and unresponsive judgment buyers out there, and even a few crooks.
The biggest problem with selling your judgment for cash up-front, is you never get very much; usually one to five percent of the face value. You almost always get much more money with a future-pay judgment recovery.