Every day, people waste time contacting me, asking me to quote them a cash upfront price for their judgment. Some send their judgment with no information about their debtor, yet include their firm selling price demand; as if their judgment was similar to a check in some kind of way.
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.
Which of these requests (as a percentage of a judgment’s face amount) for a cash upfront judgment purchase sale price seems the most reasonable? 3%, 6%, 8%, 12%, 25%, 33%, 50%, or 85%? I have heard everything, including these specific percentage requests. I also get many “I stand firm on a minimum price for my judgment of X” requests. The answer to every one of these amount and percentage quote requests is; none of the above. The cash upfront price paid for judgments always depends only on the available assets of the judgment debtor.
I work with the best judgment buyers across the country, and I know first hand, that the size of a judgment means nothing. I have seen a 10 million dollar judgment sell for $500, and a 10 thousand judgment sell for $3,000. The reason is, cash upfront prices depend only on the judgment debtor.
Cash upfront judgment purchases are usually for tiny fractions of the judgment face amount. Most people do not believe this, and spend many frustrating years trying to prove me wrong; and most never even get a penny for their judgment.
What helps to fuel false hope for judgment owners are websites that brag (e.g.) “50% Cash Upfront paid for judgments”. Such websites are a waste of time for 99% of judgment owners. Anyone that quotes you a price (more than very few pennies on the dollar) for your judgment before they perform due diligence on your debtor, is not qualified or able to actually purchase your judgment.
If your debtor is rich and has not hidden their assets, you can probably sell your judgment for big money. If not, it is going to sell for pennies on the dollar; and perhaps you should consider trying to find a contingency future-payment judgment recovery expert.
With the future payment recovery option, you pay nothing, and get paid most of what may be recovered over time. Future contingency payment is usually a creditor’s best chance for recovering something.
A judgment is not cash, and even one against a big successful bank cannot be used as collateral for a loan. These are the top eight reasons most judgments do not sell for very much cash upfront:
1) If the debtor files for bankruptcy protection, most judgments become worthless.
2) When the debtor is poor, in jail, old, sick, has died, is homeless, and/or without any assets; no real judgment buyer will pay more than about 1% cash upfront.
3) With really big judgments, another problem is, even if it is a judgment against a bank; most buyers are not rich. For example, about three months ago, a judgment sent to me was against a big successful bank, and was for 10 million dollars. Usually, 10 million dollar judgments against banks are fake, often people having only UCC liens.
Even for a particular 10 million judgment that is just about as good of a judgment as one could have; a default with a subsequent motion to vacate being denied already; and even though it might very well be worth much more than 10% cash upfront; very few buyers can afford to pay one million dollars.
That “lucky” creditor expected to get paid immediately. He insisted on getting $3.5 million cash upfront ASAP, and was shocked that I could not find a buyer to pay that much that same day. I recommended future payment recovery; which probably would have gotten him paid millions in just a few months. He refused that, and he has been frantically searching for a $3.5 million cash upfront buyer for three months (so far) without getting a dime yet.
4) It takes time and money to recover judgments, and nothing is guaranteed.
5) Courts and Sheriffs are downsizing their civil departments, and placing a lower priority on post-judgment matters.
6) In our current economy, most debtors are poor. When the economy is down, so are cash upfront prices.
7) If it is a default judgment, it may get contested and voided.
8) Many judgments settle for far less than the full amount, sometimes that is the only way to get any payment.
While most creditors do not believe it, it is a waste of time to demand any firm cash upfront price for a judgment. Real Judgment buyers determine their own pricing, based only on the judgment debtor’s situation. What you want does not matter, nor does who you shop your judgment with. Selling a judgment for cash upfront is very difficult unless you can point out available debtor assets..