Judgments As An Investment

I am not a lawyer or financial adviser, I am a judgment referral expert (Judgment Broker). Just like paintings, judgments can be purchased and sold. Just like art, you can purchase junk or buy quality investments.

Unlike art, you don't buy a judgment because of it's looks, only to place on a shelf. Anyone who purchases a judgment should plan on either enforcing it, having some entity recover it, or to sell it later, hopefully at a profit.

There are at least four good reasons to buy judgments:

1) Judgments have state-mandated interest rates. As an example, in California, the interest rate is currently 10% simple interest per year. Very few investments can match that interest rate.

2) Judgments can be renewed for many years.

3) Judgments can be purchased at a big discount.

4) Once a judgment is bought, liens can be placed on real property and also the personal property of the judgment debtor.

There are at least four reasons not to purchase judgments:

1) Judgments are not cash, and are not fungible. You cannot bring a judgment to a bank and get any cash for it, or use one as collateral to procure a loan.

2) Judgments can be risky. Everything depends on the situation and finances of the judgment debtor. If the debtor dies, moves out of the country, becomes disabled or sick, or successfully files for bankruptcy protection, the value of the judgment can fall to zero.

3) Judgments cost money to enforce or sell. If you have a judgment and want it recovered, the average cost is 50%. Worse yet, there is no guarantee, as repayment depends on the judgment debtor. If you sell a judgment for cash, you may get more or less than you paid for it.

4) Judgment liens do not pay off on "underwater" property (where there is no equity). Judgment liens can be stripped off by a bankruptcy court, or have very little effect in places like Florida.

Should you purchase a judgment as an investment? The answer depends on the details of the debtor, and the price you must pay to buy ownership of the judgment.

A judgment broker, who knows about 1000s of judgment sales, can provide you an estimate of a judgment's value. However, only the market and the details about the debtor, determine the actual selling price of any judgment.

As an investor, you should always buy judgments outright, where you own all rights, title, and interests in the judgments. Never share the ownership of a judgment, unless you get the advice of an attorney, and they have verified any shared ownership proposals.

Unlike cash or gold, a judgment is a piece of paper that only is of value to the current owner. A stolen judgment is useless. Also, if you lose a judgment, the court (for a fee) will easily replace it.

If you can afford to take some risk in your portfolio, and you can find a bargain where the risks are moderate, judgments may be no more risky that stocks. If the economy bounces back, they might be the best investments around.


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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!