Judgment Collection Roadblocks

I am not an attorney, I am a Judgment and Collection Broker. This article is my opinion, based on my experience in California, and laws are different in each state. If you want legal advice or a strategy to use, please contact an attorney.

Judgments are not guaranteed, they are only chances for getting some cash in the future. When the economy was great, a judgment was sometimes a way to get money. Now, they are just a chance of getting some money.

In an ideal situation, your debtor is rich and will repay a judgment after getting a simple reminder. That is not the way it goes 98% of the time. Most of the time, judgments are never enforced. If they get recovered, it is a slow process that often involves compromise, and partial recoveries more often than full recoveries.

Here are the top ten reasons many judgments are never recovered:

1. The judgment debtor can file for bankruptcy. Once a judgment debtor files for bankruptcy protection, all creditors must stop all collection activities, unless they later get written leave from the bankruptcy court. While there can be exceptions, most of the time, bankruptcy kills judgments.

2. The judgment debtor could die. While it is possible to show your judgment to the dead debtor's estate, when there are no assets remaining, you will not be paid. Usually, one either gets nothing or have to settle for a portion of what is owed.

3. The judgment debtor can go underground, hide assets, or remain poor. When one sues a judgment debtor using a fake name, or when the judgment debtor is a professional fraud that keeps all their assets in names that can't be traced to them, or is genuinely poor, most of the time, that means a judgment against them can't be recovered.

4. The debtor could move. It is not easy or cheap to domesticate a judgment in a new state. Several states make it very hard for judgment owners, and one of the worst is Florida. Other states impair judgment enforcement with laws that mandate that small claim cases may not be assigned, or one must be a lawyer to enforce any judgment, even a $100 one.

5. The debtor could become sick or get hurt. Disability (and social security) income cannot be reached by creditors, and disabled debtors often stop earning attachable income.

6. The debtor can file a claim of extension. Each State has exemptions for a debtor's personal property. If the debtor files an exemption claim, you need to appear at the hearing. If you do not show up, the debtor wins.

7. The judgment debtor could vacate the judgment. Especially with default judgments, requesting the court to vacate a judgment is easy and cheap. The judgment debtor might not prevail, however if you don't show up, the judgment debtor wins.

8. The judgment debtor could claim "it's not me". Especially if the judgment debtor has a really common name, or grandpa, dad, and son, all have exactly the same name; it can be difficult to recover a judgment. It might take too much money and time to prove who is the actual debtor.

9. The debtor could hire an attorney. Some judgment debtors would rather spend $12,000 on lawyers, than pay $5,000 to satisfy the judgment against them.

10. The judgment debtor can have many previous judgments and liens. When a debtor has a string of judgments against them already, many judgment recovery specialists will not even try to enforce a judgment against the judgment debtor. This isn't always fair,because the first one that recovers the judgment wins, even if there are 20 other unsatisfied judgments against the judgment debtor.