There are two ways to make money in the judgment recovery business. The
first way is to find (preferably enforceable) judgment leads. These can
be sold. The second way is to follow up on leads, and successfully
enforce the judgments. This article covers the first way - finding
judgment leads.
What is a potential judgment leads? They are
civil court money judgments that are final, and have not been satisfied.
These can be found with database web sites, web-enabled court sites, or
being (or working with) a court records researcher. Potential judgment
leads can be sold. However, these are raw leads, not worth very much,
perhaps 50 cents per lead.
Almost the opposite of a raw lead is a
preferred and enforceable judgment lead. This kind of lead has four
characteristics, that all must be, and remain true:
1) The debtor
can be found, is alive, has some assets, and has not filed for
bankruptcy protection.
2) The original judgment creditor (the
owner of the judgment) can be found.
3) The judgment remains
enforceable, meaning it is not satisfied, vacated, appealed, discharged
in bankruptcy, and not expired.
4) The original judgment creditor
wants their judgment enforced and is fully aware how much work, and
expense is involved in enforcing most judgments. Some creditors,
especially new ones, sometimes think the debtor will pay on their own,
or that enforcing judgments is easy, or a collection agency can help
them. (Generally, only a judgment enforcer or a lawyer can make a debtor
pay.)
As long as all four characteristics above remain true, one
has an enforceable judgment lead. One can stop there, and make a good
living selling such preferred, enforceable judgment leads.
Such
leads can be sold for about $10 to $20 up-front, or much more than that,
on a deferred-payment basis.
One problem with judgment lead
pricing is that nobody can predict the future. An enforceable judgment
lead can become unenforceable overnight.
That is why the true
value of a judgment lead is only known after the judgment is
successfully enforced. As an example, one company pays 5% of the profit
of enforcing the judgment, after it is enforced. This results in quicker
acceptance of the lead. And also, getting much more money than by
selling the lead for cash up-front.
Very few judgment lead
sellers offer leads with all four characteristics. The most elusive
quality of a judgment lead is often characteristic #4, the original
judgment creditor. If they can't or won't agree to have someone try to
recover their judgment, nothing can be done. Most lead sellers offer
leads with characteristics #1-3, but not characteristic #4.
How
do you find judgment leads? There are three ways:
A) Court
searches. Either at the court house manually looking at judgment
records, or an online search from a data provider, or on the court's web
site. This is a lot like mining for gold, you must wade through a lot
of mud first. Most often 90% of the leads must be discarded. Some of the
reasons include dismissed, satisfied, already assigned, expired, and
vacated judgments.
Another no-go is when the original judgment
creditor is a State entity, a bank, a credit card, or a giant company.
Such creditors generally have no interest in having a regular judgment
enforcer enforce their judgments.
After you have a list of
contenders for judgment leads, you must find the debtors, and make sure
they did not go bankrupt. Then make sure you can find the original
judgment creditors.
You can contact an original judgment
creditor, and let them know there is a company that can get their
judgment enforced. If they are willing, you have close to all four
characteristics of an enforceable judgment lead. Note that even then,
the value of the lead is not guaranteed until after the judgment is
successfully enforced.
B) Advertising. Google, Yahoo, Bing,
search engine optimizing companies, newspapers (while they are still
around), car signs, flyers, etc. This takes care of characteristic #4,
the motivation of the original judgment creditor, who can help you find
out the other characteristics.
C) Buy judgment leads. Most leads
are sold on a cash up-front basis, and most are over priced. But there
is at least one company that sells judgments on a future pay basis,
where you pay nothing up-front, and only pay for the lead after a
successful judgment enforcement.
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