Most judgments sent to judgment recovery experts and buyers these days are tough, no matter how optimistic the creditors sound. Most judgments have debtors with one or more of these kinds of problems: bankruptcies, have past-due ex-spouse and/or child support obligations, moving around often, having a crime record, many other judgments against them (including eviction judgments), and/or owning no property or vehicles.
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.
What helps to predict the chance that a judgment might be recovered? The answer determines both the possible cash upfront value of typical judgments and/or their chances for recovery. These are the top seven factors in determining a judgment’s potential value:
1) Stability and/or property ownership of the judgment debtor. It is a bad sign if they are “rolling stones”, moving a lot (especially to dodge problems). The good news is when the debtor is stable, and/or owns property or rents a nice place. However, if the debtor rents; it is bad news if they live in a dump or with a bunch of other people, for example college kids.
2) It is a bad sign when there are other judgments or liens against the debtor, because other creditors can have the Sheriff seize your debtor’s available assets before you can. It is good news when there are no other judgments or liens, or at least not any big ones.
3) Child support awards outrank most other judgment creditors. It is usually bad news when the debtor owes a lot of back child support.
4) It is bad news when the debtor is “upside down” with large debts and small income. This is because they are more likely to file for bankruptcy protection. Everyone prefers rich debtors with good jobs and long-term stable work histories.
5) It is usually bad news if the debtor drives an old clunker vehicle. While not being a guarantee of having available assets, when the debtor drives a nice car, that is usually a good sign.
6) Married with children. Unlike that old TV show, married debtors are often more stable; and that can be good news, especially in community property states.
7) Social status. Bad signs include major crime records, not caring about their reputation, being anti-social loners, or even lots of complaints about them on the web. Good news is if they keep their nose clean, maintain their property, have close family connections, dress well, and do not spend every dollar they earn.