Companies who buy judgments, and pay you cash today, are limited in number. However, there are hundreds if not thousands of companies who will “purchase” your judgment on a “future pay” basis. In a true judgment sale, you get paid in cash when you assign the judgment. In a “future pay” sale or assignment, you do not get paid when you assign the judgment.
Companies who purchase judgments for cash likely have several characteristics: 1) they are confident in their ability to execute and collect judgments, 2) they are adequately capitalized to be able to fund judgment purchases and the costs to collect, and wait to receive payment from the debtor, and 3) they have superior research capacities and collection systems.
The first issue addresses confidence in their ability to collect the judgments. Regrettably, collecting judgments is not 100 percent reliable. Diabolical debtors disappear, file bankruptcy, commit fraud, lie, hide assets and commit other criminal acts to avoid honoring their obligations. However, an expert can make reasoned judgments about the probability of collecting a debt. The most sophisticated firms have pricing models to value judgments or packages of judgments based upon the aforementioned criteria.
Firms that pay cash to buy or purchase judgments are adequately capitalized to fund the acquisition of the judgment and collection expenses until receiving payment. Adequate capitalization is an appropriate factor to consider when selecting a firm to collect your judgment. Adequate capitalization is an indication of a professional run and organized company with systems and processes to execute effectively.
Companies that pay cash up front to purchase judgments must have excellent research capabilities, execution processes and access to talented legal staff. There are hundreds of public databases that can be accessed for free or a modest monthly fee. The “future pay” collection firms likely have access to many of these. National Judgment Recovery Center, LLC has these tools, and much, much more. We have proprietary databases which no other firm is believed to have. Our team of 45 programmers and 300 researchers aggregates data from multiple sources into proprietary databases. The programmers have also developed a proprietary application to help researchers to systematically collect and catalog data on debtors.
There are thousands of companies that will purchase your judgment on a “future pay” basis, and a relatively limited number that will pay you cash today for your judgment. There are advantages and disadvantages to both options. Some companies offer both options.