Contingency Judgment Recovery Attorneys

I am not an attorney, I am a judgment referral expert (Judgment Broker). This article is based on my opinions and observations about using a contingency collection attorney to enforce a civil money judgment. Every state has different laws, and this article is not legal advice.

The word contingency means uncertainty, and implies the assumption of a risk. Most lawyers charge by the hour, because that eliminates most of their risk of not being paid for their work, and for any incurred expenses.

A contingency collection lawyer charges some or all of their fees as a percentage of a successful collection. They usually take judgments only if the debtor appears to have assets, and the risks of not being able to enforce the judgment seems to be minimal and reasonable.

Recovering a judgment always includes a financial risk. The time and expenses incurred may not result in any recovered money, and sometimes one can spend more money than one can collect. Because of this, most attorneys will only recover a judgment when they are paid a retainer upfront, and then on an hourly basis.

Of course, almost everyone wants their judgment collected on a pure contingency basis, meaning the lawyer will advance their time and expenses, and not charge anything until the judgment is collected. In a pure contingency retainer agreement, the lawyer gets their costs repaid to them first, before splitting the recovered money with their judgment creditor client.

The smaller (and riskier) the available debtor's assets appear to be, the less likely a lawyer will recover a judgment on a pure contingency basis.

Everything is negotiable, and depends on the details of the situation. Some judgments could be strong enough that a contingency recovery lawyer might collect the judgment with a pure contingency retainer agreement. With other judgments, the lawyer may want their client to pay some or all of the expenses, and the lawyer's time is usually reimbursed on a contingency basis.

Some (most?) judgments do not have enough available debtor assets for the judgment collection attempt to be performed on any type of contingency basis. In such a case, one must pay a retainer, and by the hour, and pay all expenses - or find a regular (non-lawyer) contingency judgment enforcer.

Another option is to try to sell the judgment for cash upfront, but if an attorney will not recover a judgment on a contingency basis, the judgment is probably worth very little cash up-front.

Contingency rates also vary, depending on the strength of the judgment debtor's assets. A large judgment against a rich judgment debtor might get a contingency rate of 30% for the lawyer and 70% to the judgment creditor. A riskier-looking judgment might be 70% to the lawyer and 30% to the judgment creditor. On the same judgment, one lawyer might pay for all costs, and charge 50% on a contingency basis, while another may charge only 25%, and require their client to pay a retainer upfront, and some or all costs as they are incurred.

There are some that believe that an attorney cannot advance any expenses on behalf of their clients. I am not a lawyer, but based upon my friendship with hundreds of contingency collection attorneys, I believe that is incorrect. Anything a lawyer and their client agrees to in the lawyer's retainer agreement goes.

If an lawyer was not able to advance fees, a personal injury lawyer could not do business. Nevada's rules of professional conduct, Rule 1.8(e) covers this, and other states probably have a similar rules.

Attorneys usually cannot provide financial assistance to their clients, but there is a specific exception for an lawyer advancing court costs and other expenses of litigation when the payment of legal fees are contingent on the outcome of the case or collection of a money judgment. Again, I am not a lawyer. A PDF of the rules of New York, covers this, section (e), at: (http://bit.ly/igm4vr).

Collecting a judgment always depends on the judgment debtor. If there are no current or future (or discoverable assets) of the debtor, not even the best contingency attorney (or most anyone else) could ever recover money from your judgment debtor.

In such a hopeless case, the lawyer will have invested a lot of their time and money into the hopeless judgment collection effort. If you want your judgment back (hopeless or not), you may have to have to repay the attorney for their incurred costs.