Difficult Judgment Debtors

August 11, 2023


Most judgments are difficult to recover. The economy is the first general reason, and your judgment debtor’s circumstance is the first specific reason. When a judgment debtor is really poor; an uncollected judgment is explainable, understandable, and expected. This article highlights a few of the less fair reasons for uncollected judgments.

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. Uncollected judgment situations that are less fair, are those where the judgment debtor could easily afford to pay you, however they are more than determined not to, or through planning or by circumstance, have their assets protected by laws.

A classic fraud situation is when one gets defrauded, and then sues the fraud and gets a judgment, and their judgment debtor seems to consistently be living very well. The debtor magically seems to pay cash for everything including expensive cars, travel, and fine dining, with no paper trails, and often own nothing of value in their own name.

Many judgment debtor fraudsters often have unlimited funds to fight any recovery efforts, yet often live in either a modest, or in an expensive house that is protected by homestead or exemption laws. In courts, they will claim they are poor. I know of many default judgments where the judgment debtors claimed they were dirt poor, however they could easily afford expensive lawyers for their motion to vacate, their attempt to appeal the judgment, filing for bankruptcy, and then fighting off creditor adversarial motions in BK court.

The “best” frauds rip off many people over a long period of time. They often offer “guaranteed investment opportunities”, where their victims are shown fake collateral evidence and security for loans. The common fraud is your good buddy first, and later they have a great deal for you. At first, they make you money, so you keep “investing” with them.

An example scam might go like this, you loan the fraud $10K and they pay you back 12K in 60 days. Then, you loan them $20K and they return 25K to you in 60 days. Then, you loan them $30K and in 90 days they pay you $40k. Then, they say they have the best deal ever, so you loan them $80K, and they never pay you back.

Most of these kind of fraudsters run a Ponzi scheme, with perhaps hundreds of victim investors. They used your money to pay others and vice versa. Near the end, they burned everyone at about the same time, hiding all the money. Then, they absconded to a place such as Florida. Unless they defrauded VIPs or old people, the cops and DA will not help creditors. Many professional frauds would rather live the rest of their life under the radar, and paying cash for things, than to settle with any creditors.

Another unfair situation is when a rich person or company defrauds you, and you sued them. I know of situations where judgment debtors chose to spend (e.g., $20K) on attorneys to consistently thwart judgment recovery efforts, instead of paying $10K to satisfy the judgment.

When it comes to not having to pay off judgments, being old has its advantages. When a judgment debtor is old (or disabled), many assets such as disability payments, retirement funds, and social security, are off limits to creditors, even if they defrauded you. An old slogan comes to mind: “Youth and skill are no match for old age and treachery”. Old judgment debtors sometimes get sympathy from judges, especially on judgment debtor examinations and document production requests.

At a court, I once witnessed an old lady carry her walker, walking quickly up the court steps. Then, just before entering the courtroom, she got ready. In court, she appeared to be in pain, putting her weight on her walker, and walked very slowly. It seemed as though the lady’s ailment got much worse inside the courtroom.

At the conclusion of the judgment debtor examination, the creditor complained to the judge that the debtor did not answer his questions. The lady told the judge she was sorry, but she was in too much pain and was on medication that affected her memory. The judge shook his head and said: “Mr. Creditor, why are you subjecting this poor woman to questioning? I see no reason to prolong the discomfort of Mrs. Debtor, and I am excusing her from having to answer your questions”.

The same old lady, after her judgment debtor examination, after she left the courtroom; suddenly got much better, and carried her walker and walked down the courthouse steps, and put the walker in the trunk, and drove her car away.

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