Judgment Buying

August 11, 2023

Everyone wants to sell their judgment for cash up front. However, judgments are not cash. A judgment’s value is either nothing or unknown, unless and until the judgment is enforced. Most judgments are never sold for much cash upfront due to the economy.

Most judgments are never enforced and for reasons including their expiration, become worthless. Yet most judgment owners, especially those with a newly won judgment, tend to believe their judgments are very valuable and can be sold for a high price. This belief wastes a lot of time and causes frustration.

Sometimes, when people try to sell their judgment for cash, it is as if they hope they will find a “dumb” person (someone who buys without doing due diligence) to buy their judgment for a lot of cash. What they will almost always find is a smart person, that can buy their judgment (after checking the debtor’s assets carefully), for a relatively low price.

Anyone buying your judgment will likely perform lengthy due-diligence before making you a firm offer. For a cash sale, the debtor’s assets have to be in the USA. With few exceptions, nobody pays more than a few cents on the dollar for most judgments.

When web sites brag “we pay up to 50%” for judgments, it just wastes everyone’s time. Such web site claims are one more reason judgment owners spend countless hours shopping their judgment with countless potential judgment buyers. The chances of getting 50% of the face value of your judgment is about the same as your chances of buying a big-winning lottery ticket.

On average, judgments are sold for 1-3% of their face value for reasons which include the economy, the ability of the debtor to file for bankruptcy, the difficulty and expense of enforcing judgments, and the usual lack of assets of the debtors behind the judgments.

Some judgments are worth much more than 2%. When your debtor has lots of available assets, your judgment could be worth much more. The wrong way to get the most money for your judgment is to contact every judgment buyer you can find. It might make sense to contact more than one potential judgment buyer. However, if you lose track of which ones you have contacted, you are over-shopping. A judgment broker does the shopping for you.

The right way to get a higher sales price for your judgment is to document why your judgment is worth more. Make a list of the debtor’s assets or perhaps hire a private investigator to perform an asset report on your debtor. An impressive list of debtor assets will vastly increase the price someone will be willing to pay for your judgment.

When you approach a judgment buyer, keep everything organized. Include a copy of the judgment, the proof of service, everything you know about the debtor, and every asset or hint of the debtor’s assets.

You can look for judgment buyers on the web, but often you are better off with a judgment listing service. JudgmentBuy saves you a lot of time and work, and exposes your judgment to many judgment purchasers.

Above all, lower your expectations because judgments are not cash, they are a chance of getting some cash.

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