Judgment enforcers can make a decent/good living. However there are some pitfalls to avoid. Here is a list of the top ten mistakes many new to the judgment recovery business make:
1) Not planning enough before starting your business. Are you going to be a sole proprietor or a corporate entity? Have you researched the laws of your state? Does your state allow entities to represent themselves in court? Are you going to work from home, or rent a business space? Some data providers demand that you have a business address. Are you going to get a post office box? Are you going to get another telephone line?
2) Not reading enough about the business. Have you studied any training materials on judgment recovery? There are many good courses, and also some free ways to learn. Make sure to find these resources and study this business before you begin.
3) Not starting with small claims court judgments. If you have never been in court, you might make a mistake or two. Make sure any mistakes you make involve small amounts of money. Stay in small claims court until you have recovered at least ten judgments.
4) Wasting money on poor debtors. You cannot take what is not there. There is no reason to drag poor debtors to court. Don’t spend money on recovering money from a debtor unless the debtor has money.
5) Taking judgments too far away. When starting out, many judgment enforcers take almost every judgment they run across. When the debtor, the court, or the debtor is far away, it’s better to refer the judgment to another judgment enforcer or a judgment broker. Especially when starting out, only recover judgments that are close to you.
6) Not learning the laws of your state. You must also learn the rules of the court you are going to be working in, the federal laws about judgment and debt collection, and the laws of your state. If you don’t know the laws, you won’t recover money, and might end up spending money if you make a mistake
7) Confusing large judgments with large assets. A $5,000 judgment against Bill Gates is worth much more than a million dollar judgment against a 70-year old homeless person. It’s not the size of the judgment, it’s the size of the available assets to pay it.
8) Not budgeting for expenses and taxes. Any business has expenses, taxes, and a startup period with no income. Expect to work hard for months before seeing the first dime of profit. When you make a profit, remember some of it must be saved for taxes.
9) Not keeping current with the business. Laws, economies, policies, and the world are always changing. You must keep current and always keep studying.
10) Not understanding what is a good judgment lead. Raw leads are almost worthless.
The three easy ways to get judgment leads are to:
A) Put up a web site, and pay Yahoo, Bing, and/or Google to drive leads to your site. Or generate good content that helps people. Unfortunately, those leads are sometimes from shoppers who spend a hour of your time, then spend a hour of time with many other judgment enforcers, trying to find the best “deal”.
B) Buy raw leads from a lead provider. Unfortunately most of those leads will not pan out. Many of the creditors have no clue or will not assign their judgment to you. Many of the creditors and debtors will not be found.
Leads from both A and B above, are more likely to have judgment owners that think their judgments are cash; and want you to buy their judgment for too high a price, or enforce it for too low a price.
C) Get no-cost upfront judgment leads from a judgment broker. These are the best leads as the debtors are found, and the judgment owners are informed, and want their judgment enforced or purchased.