There are two ways to make money in the judgment recovery business. The first way is to find (preferably enforceable) judgment leads. These can be sold. The second way is to follow up on leads, and successfully enforce the judgments. This article covers the first way – finding judgment leads.
What is a potential judgment leads? They are civil court money judgments that are final, and have not been satisfied. These can be found with database web sites, web-enabled court sites, or being (or working with) a court records researcher. Potential judgment leads can be sold. However, these are raw leads, not worth very much, perhaps 50 cents per lead.
Almost the opposite of a raw lead is a preferred and enforceable judgment lead. This kind of lead has four characteristics, that all must be, and remain true:
1) The debtor can be found, is alive, has some assets, and has not filed for bankruptcy protection.
2) The original judgment creditor (the owner of the judgment) can be found.
3) The judgment remains enforceable, meaning it is not satisfied, vacated, appealed, discharged in bankruptcy, and not expired.
4) The original judgment creditor is intelligent, and wants their judgment enforced and is fully aware how much work, and expense is involved in enforcing most judgments. Some creditors, especially new ones, sometimes think the debtor will pay on their own, or that enforcing judgments is easy, or a collection agency can help them. (Generally, only a judgment enforcer or a lawyer can make a debtor pay.)
As long as all four characteristics above remain true, one has a good enforceable judgment lead. One can stop there, and make a good living selling these good and enforceable judgment leads.
Such leads can be sold for about $10 to $20 up-front, or much more than that, on a deferred-payment basis.
One problem with judgment lead pricing is that nobody can predict the future. An enforceable judgment lead can become unenforceable overnight.
That is why the true value of a judgment lead is only known after the judgment is successfully enforced. As an example, JudgmentBuy pays 5% of the profit of enforcing the judgment, after it is enforced. This results in quicker acceptance of the lead. And also, getting much more money than by selling the lead for cash up-front.
Very few judgment lead sellers offer leads with all four characteristics. The most elusive quality of a judgment lead is often characteristic # 4, the original judgment creditor. If they cannot or will not agree to have someone try to recover their judgment, nothing can be done. Most lead sellers offer leads with characteristics # 1-3, but not characteristic # 4.
How do you find judgment leads? There are three ways:
A) Court searches. Either at the court house manually looking at judgment records, or an online search from a data provider, or on the court’s web site. This is a lot like mining for gold, you must wade through a lot of mud first. Usually about 90% of the leads must be discarded. Some of the reasons include dismissed, satisfied, already assigned, expired, and vacated judgments.
Another no-go is when the original judgment creditor is a State entity, a bank, a credit card, or a giant company. Such creditors generally have no interest in having a regular judgment enforcer recover their judgments.
Another problem is when creditors imagine judgments are easy to recover, or will recover themselves, and will not be willing to pay any share of a recovery which means nobody can help them recover their judgment.
After you have a list of contenders for judgment leads, you must find the debtors, and make sure they did not go bankrupt. Then, make sure you can find the original judgment creditors.
You can contact an original judgment creditor, and let them know there is a fantastic company that can get their judgment enforced, that offers the best chance of them being repaid. If they are willing, you may have close to all four characteristics of an enforceable judgment lead. Note that even then, the value of the lead is not guaranteed until after the judgment is successfully enforced.
B) Advertising. Google, Yahoo, Bing, search engine optimizing companies, newspapers (while they are still around), car signs, flyers, etc. This often takes care of characteristic # 4, the motivation of the original judgment creditor, who can help you find out the other characteristics.
C) Buy judgment leads. Most leads are sold on a cash up-front basis, and most are over priced. But there is at least one company (JudgmentBuy) that sells judgment leads on a future pay basis, where you pay nothing up-front, and only pay for the lead after a successful judgment enforcement.