If you’ve ever wondered what happens to a bill that goes to collections, they usually end up in a judgment. A judgment is the official decision of a court at the completion of a lawsuit. If a creditor, lender, debt collector, attorney, or some other party files a lawsuit and wins, a judgment is made, indicating that the court has resolved the issues brought before it in a lawsuit in favor of either the plaintiff or the defendant. It generally stipulates a monetary award to the winner. Where very-large awards are concerned, a judgment is frequently placed ‘on hold’ pending the outcome of an appeal to a higher court.
In civil lawsuits, enforcement of a judgment is not handled by the court that handed down the decision. Instead, enforcement is left in the hands of the parties in the lawsuit. While most people comply with the court’s order, there are exceptions that require the winning party to take further action to collect the funds that were awarded. In addition to resolving the issues themselves, a judgment in civil cases almost always pays both damages and court costs to the party that prevails.
Collecting on a Judgement
Obtaining a legal judgment does not necessarily ensure that you will ever collect the amounts awarded to you by the court. It merely gives you the right to take any lawful steps available to do so. This may include seizing property or other assets, forcing a Sheriff’s sale or even garnishing monies due to the debtor. Many civil lawsuits are never even filed because an investigation fails to turn-up enough assets to make the additional costs worthwhile.
Escape By Way of Bankruptcy
It is possible to discharge the amounts owed under many judgments by filing bankruptcy. However, there are exceptions, including judgments for the payment of child support and delinquent income taxes.
Judgements are also considered assets in bankruptcy cases. If the person filing bankruptcy holds any judgments against others, they are often seized and liquidated to pay secured creditors in the case. This is how we obtain our inventory of judgments.
Buying a Judgement
Buying a judgment is just like buying any other asset that is assigned to a specific holder. An assignment for the benefit of the creditors is completed for the new owner. This is a voluntary transfer of all or most of a debtor’s property to another person in trust so that he or she will collect any money that is owed to the debtor, sell the debtor’s property, and apply the money received to the payment of the debts, returning any surplus to the debtor.
The debtor is the assignor, the transferor; and the person who takes legal title to the property is the assignee.
The new owner now has the legal right to collect on the judgment, they are now the creditor.
Judgement Recovery Specialist
Judgement Recovery Specialists are professionals that can collect on your judgments for you. They are small business owners that recover judgments for a fee, usually 50-60% of the judgment value returning 40-60% of the value to the original creditor.
If you choose to use a Judgement Recovery Specialist, know that the judgment must be assigned to them. This means you no longer own the judgment so make sure you have supplemental contracts in place to recover your percentage of the value.
Thanks to The Debt Kid.