Selling A Judgment For Cash Is Tough

As I am a judgment broker, I observe a vast quantity of judgment sales and many more attempted judgment sales. I see that every week, the amount of money anyone is willing to pay for judgments is falling.

The value of judgments depends solely on the status of the judgment debtor. With the economy declining, almost everything and everyone's assets are shrinking or losing value. Wages are down, home prices are down, employment and opportunities are down, savings are down. When a debtor owns nothing, a judgment is worth nothing.

Even when a judgment was for fraud, and the debtor stole a lot of money from you, many frauds do not do very well in over the long term. Most people that had wealth several years ago are no longer rich. Most people are not doing so well now, and most judgment debtors are doing even worse.

Purchasing a judgment is always risky. In an upward economy the risks were smaller, because most debtors (and their families) were destined to make more money in the future. In a growing economy, buying a judgment would be a moderate risk.

Now, buying judgments has become much more risky. Here are the top ten reasons selling judgments for cash up-front, provides much smaller cash prices now, because of the increased risks:

1) Job loss and business failures. Debtors might find work under the table, for instance selling illegal things or being an unlicensed contractor, etc. Such income sources are very hard to verify or recover.

2) With home prices sliding, liens are much less likely to pay off.

3) Debtors are much more likely to file for bankruptcy protection. In the overwhelming majority of cases, bankruptcy cancels most judgments. Note that even if the judgment was for fraud, it requires a lot of time and money in bankruptcy court to bring this to the court's attention. Also, if the debtor is poor, you still will not get paid, or recover the extra costs to make your judgment non-dischargeable.

4) Judgment debtors are now more likely to attempt to appeal or to set-aside/vacate judgments. If you buy a judgment outright and the debtor wins a motion to vacate, your judgment is gone.

5) Recovery expenses are always rising. Courts and sheriffs are raising their fees.

6) Laws are changing to better protect judgment debtors, protecting their privacy and increasing their exemptions from a creditor's levy.

7) Each year it becomes more difficult to recover a judgment against judgment debtors older than 65 years old.

8) Because asset values (vehicles, property, etc.) are declining, the economics of sheriff auction sales are making less sense.

9) As the economy slides, more and more people attempt to get cash now for their judgments, which moves cash up-front pricing for average judgments down.

10) The same risks that have always kept cash up-front values low still remain. If the judgment debtor dies, becomes disabled, poor, moves far away, or goes "underground", the judgment becomes worthless.

Sometimes good things happen to judgment debtors, for instance they might inherit a house or win the lotto. Cash up-front buyers cannot count on rare potential luck.

However, future pay recovery specialists can take advantage of such lucky breaks, and then share the luck of the debtor with you. Unless your debtor is wealthy, you are always better off with a future-pay judgment recovery specialist or a contingency collections attorney.