At our company, we have checked the long-term fates of more than 20,000 judgments over many years. The only good news is that our initial opinions of the judgment creditor’s actual situations (by searching only public data records on the judgment debtor) were almost always correct. The bad news is it seems that more than 95% of creditors not paid quickly, got paid nothing for their judgment; no matter how many people and companies they sent their judgment to.
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.
Currently, there is an often-quoted statistic seen all over the web, that comes from the old days (about 15-25 years ago); that “80% of judgments are never recovered”. With the nationwide loss of assets, jobs, and income for the average person, that old statistic fell apart long ago. I think the statistic is now closer to 95% of all judgments are never sold or recovered.
When our company is sent a judgment (and more importantly, information about the judgment debtor) we view the judgment debtor’s situation using only public data record searches, and our somewhat proprietary web-based searches. We give creditors a limited; however honest, objective, and free summary of their judgment situation.
Consistently, creditors with average judgments contact us, and say their debtor is rich; and they usually want to sell their judgment quickly for cash upfront at (e.g., 50-95%) of its face value.
The most common scenario is a judgment is sent to us, with an allegedly “rich” debtor. When we use public data searches, we find their debtor does not own much of anything, and has many judgments against them, and/or crime and bankruptcy histories, uses several SSNs, etc. Often, the creditor’s rosy picture for their debtor’s situation, was from a long time ago, before the debtor got sued, and has since soured; and there are now no available assets that can be attached to repay the judgment.
We have been sent at least 20 thousand judgments over many years, and when we have to tell creditors we think their debtors seem poor now, and nobody will buy their judgment for (e.g., 50%) cash upfront; the usual reaction is the creditor instantly rejects our expert opinion. They say we are wrong, and some say they will go to websites that will pay them (e.g., 50%) cash upfront for their judgment.
Nobody pays even 10% for average judgments. Because our company insists on a copy of the judgment before we will research the debtor using public data records, we have checked the long-term results for thousands of these “rejecting creditor” judgments.
When you have the case number, most court websites let you see a summary of judgment actions within their court. Some courts do not have websites which show detailed judgment transaction histories. In our several-year study, we sampled more than 3,000 rejected judgments; however only 1,700 had court information online that we could check.
All judgment sales and recovery procedures require court actions. Out of that group of 1,700 “rejecting creditor” judgments, only 8 had any kind of court actions whatsoever. That means 1,692 of those creditors never found a judgment buyer or got a dime for their judgment.
If their judgment was sold, an assignment of judgment would have been filed at the court. If anyone was trying to recover the judgment; there would have been a writ of execution or a similar kind of document, filed at the court. Even for the eight judgments with any kind of court actions; only three creditors got any money, and only two judgments were fully satisfied (probably with a settlement for less than the full amount owed).
Of course, many other creditors did believe our initial opinion about their judgment’s situation, and we quickly found the best recovery experts for them. Even though we are the best, and work only with the best; even with our help, less than a quarter of judgments sent to us have any money recovered. All too often debtors filed for bankruptcy protection or lost their houses/jobs. When a creditor accepted an actual judgment buyer’s offer, they got paid. When a creditor used a recovery expert, they got a real chance to get paid much more than a cash upfront sale, over time.
Out of the many thousands of free creditor referrals we have made over the years to experts, so far, only about 25% percent of the judgments had any money recovered at all; a very sobering statistic. Even so, this is a bit better than the general 95% statistic, because these were creditors who faced reality and found the best judgment enforcers. No wonder real judgment buyers do not pay much for average judgments.