This article is about the future-payment concept for recovering civil money judgments. Future-pay means you get paid later, after money is recovered, instead of cash up-front “now”. (Future payment gets you 50-75% of whatever an expert recovers from your debtor over time. Cash upfront is usually 1-25% cash upfront, unless your debtor is very rich.)
Every judgment, is only a piece of paper until available debtor assets are found and successfully levied, and the judgment is successfully and eventually enforced. If the judgment debtor has lots of available assets, you will probably get some money back quickly, however nobody can or should guarantee that.
Judgments are not cash, they are chances for cash in the future. Judgments are expensive and complex to recover, and their recovery depends entirely only on the debtor to repay them. Bankruptcy or other factors can make a judgment worthless.
Most people owning judgments want to sell them for cash up-front. The problem is that nothing is guaranteed in judgment enforcement. Because of the risks of not recovering anything, most judgments sell for 1-10% of their face value on a cash up-front basis.
Future-Payment contingency recovery reduces the risks for the judgment recovery expert or lawyer. Because of the reduced risk, after collecting from the debtor, they later pay you a much higher price for your judgment, usually about 50% (or more) of whatever they can recover from your debtor. Future payment recovery experts only make money when they recover your money, no money out of your pocket.
Everyone would rather get cash up-front, and that may be possible, especially when your debtor has a large amount of available assets. However, the reality is that most debtors do not have obvious available assets to pay off a judgment. Almost nobody buys judgments, as an an example, JudgmentMarketPlace is a waste of time for most creditors. Almost always, future-payment contingency recovery gives you the best chance of getting the most money for your judgment.
Future-payment allows the judgment recovery expert to be patient and wait for the debtor to acquire some assets. Even a poor debtor might inherit money or real estate, win the lotto, or get a job – anything could happen, they may even go bankrupt and make the judgment worthless. A cash up-front judgment buyer takes all the risk, and does not count much on anything changing with your judgment debtor.
With most judgment recoveries, money is recovered in chunks, either via a payment plan, or Sheriff levies of the debtor’s assets. Usually money is not recovered easily, or in just one single payment.
It can take many years and a lot of work to recover a judgment – so even if you get cash up-front for your judgment, the judgment buyer’s money is always recovered later on a future pay basis.
When a judgment buyer or a judgment recovery expert, is local to your debtor, that increases the chances of getting money from the debtor. With Future-payment contingency recovery, you then get (e.g.) 50% of the recovered money (sometimes including interest) paid to you.
Many people agree that (e.g.) 50% later (often including future accruing interest) is better than a tiny fraction of 50% “now”.