Collecting Judgments

August 9, 2023


After you get ripped off and sue someone, that is only half the battle. Judgments do not collect themselves, and the courts will not help you collect your judgment. Usually, a judgment is just a piece of paper with an imaginary value. If you used an attorney to win your judgment, often collecting judgments is not their specialty. If you hired an attorney to win your lawsuit, you might owe them a lot of money to get that fancy piece of paper. With few exceptions, it costs lots of money and time to collect a judgment.

The person or entity owing the money is the judgment debtor, the one owed the money is the judgment creditor. The laws related to judgment collection vary in each state. Judgments usually earn interest, usually two to twelve percent per year, and last for a limited number of years, usually five to twenty years.

Most people do not understand how hard it is to collect most judgments. More than 90 percent of them are never collected. Judgments do not sell for much cash upfront, the average sale price is about 1-7%. Anyone that brags that they pay 50% cash upfront for judgments, or guarantees a quick judgment collection in full, is lying.

This article is my opinion, 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. If you are considering suing someone, it makes sense first to hire a private investigator to determine if they have any assets, and (especially when suing a company) take care to properly identify who should be sued.

The methods of collecting judgments are not guaranteed, and bankruptcy can kill most judgments. One method used in judgment collection is to record liens on the judgment debtor’s property. Another method is getting a writ of execution from the court and pay a Sheriff or Marshall seize a judgment debtor’s property to sell at an auction. Another method is to have the Sheriff seize the judgment debtor’s funds from their bank account, or intercept some of their wages or other income streams.

Judgment collection usually takes a long time, even longer now because of budget cutbacks at courts and Sheriff’s offices. Some other problems with judgment collection are judgment debtors often try to hide their assets, the laws offer them exemptions, it is expensive to attempt to undo Fraudulent Transfers (and FT time limits are very short), everything must be done through the courts and Sheriff, and the judgment collection-related forms are complicated.

To attempt to collect money from your judgment, you can try to collect it yourself, hire a lawyer, try to sell it for cash upfront (at a very steep discount), or find a future-payment contingency collection solution. The word contingency is starting to get avoided by non-lawyer collection experts. However, future-payment and contingency collection usually mean the same thing; usually you pay nothing out of pocket, and get an average of half of whatever might get collected.

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