What Is a Judgment Broker?

A Judgment Broker (JB) is an entity that helps Original Judgment Creditors (OJCs - the entity that won the lawsuit and owns the judgment). The JB helps by matching OJCs with either buyers or Judgment Enforcers (JEs), who try to recover the money owed so that the OJCs can be paid.

There are millions of judgments and many thousands of judgment buyers and JEs, 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 JE or 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 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 that are recovered are purchased on a future-pay basis. This means that the OJC gets paid after the money is recovered from the debtor's assets.

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

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

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

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

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

JEs must own a judgment in full, so they can "step into the shoes" of the OJC for JE 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 Judgment Broker is only paid (by the JE, from the money recovered from the debtor's assets) for success, the JB has every incentive to recommend their estimation of the most qualified JEs.

Note that using a JB does not cost the OJC anything. The JE pays a small share of profits to the JB, but only if the judgment is profitably enforced. JEs 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 JEs do not take judgments too far away from them. The same JE 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.