Celebrating 10 years! 2007-2017

Buying Judgments

I've had a couple of big hits on collecting non-consumer deb jorgedeclaro07/26/17
No thoughts as I have not ever done this, but your post peak jd4hire07/26/17
Researching property and assets of debtors through public re jorgedeclaro07/26/17
Don't buy unless you have a verified asset. Non-consumer jud vohod07/26/17
Still need licensed. There is a non-consumer debt carve out jorgedeclaro07/26/17
Not trying to be crass, but I don't think it's as lucrative mrtor07/26/17
The law is easy in many cases, except when it isn't you have vohod07/26/17
Debt collection is filled with rinky-dink consumer debt that jorgedeclaro07/26/17
Buying judgments has always intrigued me but I'm not enough mcacollector07/26/17
How did you get into commercial? I do mostly replevins and c vohod07/26/17
I basically just fell into it, I work mostly with companies mcacollector07/28/17
Nearest market is Minneapolis/St. Paul. I am in a lot of rur vohod07/28/17
The debt buying industry is filled with attorneys who overpa dingbat07/27/17
jorgedeclaro (Jul 26, 2017 - 3:43 pm)

I've had a couple of big hits on collecting non-consumer debts. As a real estate attorney I know liens and foreclosures pretty well. I was thinking about researching and buying some judgments to collect. I have a few leads on some non-consumer debt judgments that could probably be collected at a decent rate of success. I've figured out that I would have to get licensed as a collection agency, but seems doable. Seems like most of the collection agency no-nos arise from trying to collect debts that haven't been reduced to judgment.

Anyone have any experience buying judgments or advising clients on buying judgments? Anyone have any thoughts or advice?

Reply Like (0)
jd4hire (Jul 26, 2017 - 4:13 pm)

No thoughts as I have not ever done this, but your post peaked my curiousity...when you say "big hits," what are you talking?

Reply Like (0)
jorgedeclaro (Jul 26, 2017 - 6:32 pm)

Researching property and assets of debtors through public records to find non-exempt assets and collect on judgments which were presumably uncollectable.

Reply Like (0)
vohod (Jul 26, 2017 - 4:19 pm)

Don't buy unless you have a verified asset. Non-consumer judgments keep you out of the FDCPA. I'd also be curious to know if buying non-consumer judgments even bring you within your state's licensing scheme.

Never buy a judgment for more than 1/3 of the net profit you will get from said asset. There will ALWAYS be a snag, the sheriff's fee is not insignificant, and you own the risk that some unforeseeable event dashes collections on said asset.

Edit: E.g., $750,000 jmt against Bob's Widgets. Company has substantially no assets left, a personal guarantee, and Bob and Company combined have $90,000 in collectible assets. Anything over $30,000 offer is pure gambling.

But judgment/receivable buying is always a gamble.

Reply Like (0)
jorgedeclaro (Jul 26, 2017 - 6:37 pm)

Still need licensed. There is a non-consumer debt carve out but it is probably narrower than the legislature intended.

I'm thinking much lower that 30% net profit and I'm fairly certain the creditor would be too. I'm thinking of offering under 10% of the face value of the judgment and not buying a portfolio, just picking and choosing the ones I've researched and think look good.

Reply Like (0)
mrtor (Jul 26, 2017 - 4:31 pm)

Not trying to be crass, but I don't think it's as lucrative as it appears at face value. Debt collection is among the simplest legal fields and there are plenty of attorneys who could flood this market. The fact that they haven't should not be interpreted as luck or ingenuity on your behalf. There's a reason -- and that reason is that the cost-benefit return isn't great. It is a high stress, labor intensive field with little to show for it in most cases.

In many ways, debt collection is like gambling. You hit hot streaks, buy in with your profits, and will usually lose longer term. I'm not saying you can't make a living off of it, but I haven't come across any debt collection attorneys who really made it big.

Reply Like (0)
vohod (Jul 26, 2017 - 4:48 pm)

The law is easy in many cases, except when it isn't you have a matter of first impression concerning largely procedural rules and statutes. There isn't a middle ground.

The skill is in investigation of executable assets, not your ability to sign a writ or legal papers.

Reply Like (0)
jorgedeclaro (Jul 26, 2017 - 6:40 pm)

Debt collection is filled with rinky-dink consumer debt that's not reduced to judgment and worthless once it is. I wouldn't touch it with a 100 foot pole.

Reply Like (0)
mcacollector (Jul 26, 2017 - 6:07 pm)

Buying judgments has always intrigued me but I'm not enough of a gambler to actually do it - maybe if I had a financier. I do commercial collections and the hardest part is locating assets to attach. Otherwise, it's pretty much a breeze. It would be boring, but for the occasional psychotic debtor popping up to keep it interesting. I do ok, so can't complain too much.

Reply Like (0)
vohod (Jul 26, 2017 - 6:10 pm)

How did you get into commercial? I do mostly replevins and consumer. Very few commercial executions.

I want to do commercial or FDCPA defense.

Reply Like (0)
mcacollector (Jul 28, 2017 - 5:10 pm)

I basically just fell into it, I work mostly with companies that provide financing to small businesses (technically through receivable factoring). It's big in the NY market. Where are you located Vohod?

Reply Like (0)
vohod (Jul 28, 2017 - 5:17 pm)

Nearest market is Minneapolis/St. Paul. I am in a lot of rural collections/replevin matters. Some work comp for medical creditors.

Reply Like (0)
dingbat (Jul 27, 2017 - 3:00 pm)

The debt buying industry is filled with attorneys who overpay thinking they can write a few nasty letters and collect a quick paycheck.

Buy in bulk knowing that you'll never collect on 90% of the accounts and factor that into your costs. If professional debt collectors are bidding on the same portfolio, don't outbid them, they know the true value
Before you start, and as you move along, put systems in place to (a) be more efficient, and (b) stay in compliance with the law (or at least plausible deniability)

Reply Like (0)
Post a message in this thread