I am not a lawyer, I am a Judgment Broker. Nothing in any of my articles should ever be considered legal advice. This article is my opinion about silly beliefs that prevent judgments from being enforced.
The valid reasons why judgments are not enforced are serious enough. (The number one reason is because most debtors are poor.) This article is about some shenanigans and false beliefs that can make things worse, and prevent judgments from being recovered.
First, let us cover the ways Original Judgment Creditors (OJCs) (the judgment owners) impair their chances of ever getting money from their judgments:
1) “My judgment is worth its face value and all accrued interest.” That belief is based on theory, not reality. A more accurate answer is a judgment is worth whatever a judgment buyer will actually pay you. The average payment is about 3% of the face value, or 50% of whatever is recovered in the future on a contingency future-payment basis. (Or it is worth what available assets the debtor possesses, that you can find, and pay someone to recover, or pay the Sheriff to recover.) And, if the debtor goes bankrupt, most judgments are worth zero.
2) “The debtor will have to pay me.” Nope. There is no law and no incentive for a debtor to pay a judgment – unless the debtor has assets – and one spends time and money to recover those assets – and even then, nothing is guaranteed. A long time ago, when property was getting refinanced annually and prices for homes kept increasing, and almost everyone had a job and wanted to buy things on credit, recording liens was an easy way to get your judgment paid. Those days are almost gone, or at least are much rarer now.
3) “I have a $895 judgment and I refuse to pay 50% on a future-payment basis to get it recovered, I am willing to pay 30% at most.” That does not compute, because it costs a lot of money to recover a judgment. Nobody will ever enforce an $895 judgment for 30%, because it is not worth their time to enforce a judgment for so little profit. (Judgment Enforcers are in the business to make money, and there is no room for personal grudges in judgment recovery.)
4) “My debtor cannot go bankrupt.” The truth is they can. If your judgment is specifically for fraud, and you or your lawyer show up in court on the date of the hearing, and bring the fraud to the court’s attention – and fight to make your judgment debt declared non-dischargeable, there is a good chance you will be able to pay more to get your judgment recovered. If your judgment is not for fraud, it will probably be lost forever.
None of the beliefs above help a judgment to be recovered.
Next, let us cover the ways judgment enforcers impair their chances of ever getting money from most of the judgments they are working on.
1) “I take every judgment that comes to me, one of them might pay off.” The truth is, you do not have any business taking a judgment you cannot recover money on, unless you buy the judgment outright, or fully inform the OJC that your plan is to hold onto the judgment for a long time without taking actions other than recording liens.
2) “I enforce judgments anywhere.” The truth is unless you hire lawyers close to the debtors, when the debtors are far away – you should only take judgments local to you, and refer any judgments that are further away than you want to drive to.
3) “I reject 97% of the judgments that come in, and I just say no thanks.” When you reject a judgment, always take the time to explain why to the OJC. If you do not, the OJC will simply keep contacting judgment enforcers or a Judgment Broker, over and over, until they consistently hear the same valid reason, for instance “your debtors are poor”. Only telling the truth consistently, can educate an OJC with a crummy judgment.
When original judgment owners (OJCs) think their judgments are worth their face value or more, and Judgment Enforcers (JEs) do not consistently explain reality to the OJCs, it creates a loop where OJCs may contact hundreds of JEs, wasting lots of time and further reducing the chances the judgment will ever be even partially recovered.
Some OJC contacted me 2 years ago, and I then told the OJC the truth – their 67-year old debtor is poor. Then, over the next 2 years, I got the same judgment lead from about 100 JEs, for the same OJC.
One more example is an OJC with a million dollar judgment, with a debtor who is 67 and poor. The OJC strongly believes their judgment is worth more than one million dollars, and for 2 years, they bent countless ears, wanting $500K upfront for their judgment the first year, $450K the next year, and just called me recently, wanting 400K for their judgment.
For 2 years, that OJC did not face reality, and keep shopping their judgment, falsely believing shopping was the solution. The reality that I told them 2 years ago, is still true. The creditor is still shopping their judgment! A judgment’s worth depends on the debtor, not the needs, hopes, or wishes of anyone.