If you buy, recover, or outsource judgments, or are going to sell or refer judgment leads; you need to learn how to correctly handle and screen judgment leads, especially raw judgment leads. Judgment leads can be dirt or gold depending on the judgment debtors, and even more importantly, when you screen the Original Judgment Creditors (OJCs).
If you find and refer raw leads from (e.g., court records), there is very little chance of any particular raw lead paying off. If you talk with the OJCs, you can confirm a good judgment lead if the OJC:
1) Wants their judgment recovered or purchased by someone.
2) Still owns their judgment and that the judgment is still valid.
3) Knows and agrees that they must share any possible recoveries when they outsource their judgment, or will get only a fraction of the judgment face value from a judgment buyer.
4) Their judgment debtor can be found, and is not poor or bankrupt.
If these four things are true with the OJC, then you probably have a good judgment lead. You can screen judgment leads for yourself to recover or buy, or you can sell these judgment leads. If you sell them, the choices are pennies per raw lead, or about 5% of what may be recovered in the future. 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.
Do not fall into the trap of waiting to find giant judgments against rich debtors, those are as rare as 4-leaf clovers. A $3,000 judgment lead against a solid debtor with a job and a bank account is better than a million dollar judgment against a homeless old man with nothing, or a judgment against a long dead company with no alter-ego battle possibilities.
To recover judgments on a future-payment contingency basis, or run a successful judgment referral business, you will make a lot more money when you screen the OJCs. I do not mean looking OJCs up on Google or some data service, I mean to screen them for their beliefs and attitudes about their judgment.
If the OJC thinks their judgment is guaranteed, or they can sell their average judgment for 50 cents on the dollar cash upfront, or does not want to share any portion of what is recovered, they will most likely never get any judgment money.
If you buy a judgment for cash upfront, as long as your purchase agreement is solid, and you record the assignment of judgment at the court, and you pay the OJC; you usually do not have to worry too much about loony OJCs.
Whenever a judgment is recovered on a future payment basis, the reasonableness of the OJC, and sometimes even their sanity, is an important factor. Some OJCs do not fully understand that they are outsourcing their judgment and all judgment recovery efforts, and some want status updates several times per day. (Judgment recovery can take years.)
Actual recovery of judgment money depends on the available assets of the judgment debtor. For a successful future pay contingency recovery effort, an OJC must:
1) After finding you, stops shopping their judgment.
2) Have reasonable expectations and be patient. There are no instant results and many risks in judgment recovery. Full judgment recoveries are becoming rarer.
3) Understand that they are done with their judgment, which they usually assigned. After finding you, OJCs should not contact anyone about their judgment, especially the judgment debtor.
4) Be and stay reasonable. This is especially important. If the OJC fails to meet these four requirements, there will be many hassles and disappointment.
A raw lead is often worth zero. Many unenlightened OJCs send judgment inquiries to hundreds of people, and a copy of their judgment to dozens of people. Most of these OJCs will not respond when you return their emails, send them a letter, or leave them a voice mail in response to their contact.
If you call OJCs, many will say they are interested and will follow up, however many do not. Another problem is OJCs often send a copy of their judgment, however nothing about their judgment debtor. If the judgment debtor has a unique name, this may not be an issue; however if the judgment debtor cannot be found, the judgment lead is worthless.
If you wish to contact each OJC ten times, that is fine; however I have found that people who start out being unresponsive often remain unresponsive over the long term. In my experience, you cannot fix what is broken in others, you can only fix what your responses are.
It is better to spend your time on the people who are responsive and reasonable, than to try to change someone who has a bad attitude, seems clueless, or is unresponsive. The goal is to stay friendly, and let OJCs know you have the best real solution, and they can contact you anytime they are ready. Alas, some OJC shop their judgment until it expires worthless.