What are Judgment Brokers?

A Judgment Broker (JB) is an entity that helps original judgment creditors (the entity that won the lawsuit and owns the judgment). The JB helps by matching owners of judgments with either judgment buyers or judgment enforcers, who try to recover the money owed on the judgment so that the owners can be paid.

There are millions of judgments and many thousands of judgment buyers and recovery specialists, so why is a Judgment Broker needed?

The first reason a JB is needed is that unlike fungible instruments such as money or gold, a judgment's value depends on many things including the debtor and their assets, laws, the economy, and the skills and location of the judgment enforcement specialist or judgment buyer.

The second reason a JB is needed is because most Judgments are never collected because laws tend to make it difficult to collect from debtors. A few judgments are sold for cash, especially in States where future payment for judgments is not allowed.

Judgments sold for cash sell for very steep discounts from their face value. The average judgment sold for cash sells for an average of less than 3%. For this reason, most judgments that are recovered are purchased on a future-pay basis. This means that the Original Judgment Creditor gets paid after the money is recovered from the debtor's assets.

What does a JB do? They attract and research judgments, noting all the factors that determine who is best suited to enforce the judgment. The JB (and anyone else) should only be paid if the original judgment creditor is repaid. The JB has every incentive to pick the best-suited judgment enforcers to maximize the chances of successful recoveries of every judgment.

The JB maintains databases of judgment enforcers close to the debtor and their assets. The JB may pick one judgment enforcer for a small claims judgment, and another for a larger judgment involving fraud.

For each judgment, the JB contacts judgment enforcers close to the debtor's assets, sometimes discussing the judgment with several judgment enforcers. This is done without bothering the original judgment creditor.

Only after a match of the right judgment enforcer for a particular judgment has been made, does the JB contact the original judgment creditor. After the JB introduces the original judgment creditor to the judgment enforcer, the JB steps out of the picture. The JB then moves on to match the next judgment, for the next original judgment creditor.

Note that the JB never legally owns judgments, as that could create complications in the chain of ownership, which is important because most judgment enforcers are not lawyers.

Judgment Enforcers must own a judgment in full, so they can "step into the shoes" of the original judgment creditor for judgment enforcement procedures. For this reason, a JB can be thought of as a Judgment Enforcement Catalyst. (A catalyst helps start and speeds up a process, without being affected by the process.)

The JB cannot guarantee the performance of judgment enforcers they recommend, as the judgment enforcers are not employees of the JB; they are independent entities. The JB also cannot guarantee the enforceability of any judgment - nobody can.

Because the JB is only paid (by the judgment enforcer, from the money recovered from the debtor's assets) for success, the JB has every incentive to recommend their estimation of the most qualified judgment enforcers.

Note that using a JB does not cost the original judgment creditor anything. The judgment enforcer pays a small share of profits to the JB, but only if the judgment is profitably enforced. Judgment enforcers pay nothing up-front for judgment leads.

In return for paying a small percentage of profits, the enforcer gets pre-screened judgments, matched to be in the same city as the debtor's assets. Most judgment enforcers are very willing to pay a small percentage of their potential profit for no obligation, no payment up-front, screened, verified, and customized location-matched leads.

The JB also pays anyone for judgment leads. In most cases, the JB pays half of what they get, and once again, only pay when the judgment is successfully enforced. Experienced judgment enforcers do not take judgments too far away from them. The same judgment enforcer that accepts judgment leads from the JB typically also refers judgment leads to the JB.

The judgment broker fills a vital role in helping both the judgment enforcement business and the original judgment creditor increase their chances of getting paid.

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About the Author:
Mark D. Shapiro - Judgment Referral Expert - friend to all Judgment Enforcers and contingency collection attorneys: http://www.JudgmentBuy.com - where Judgments go to get Purchased or Enforced!