Buying Judgments In California to Collect

 

CALIFORNIA

There are no special restrictions in the state of California when being assigned judgments. The assignee of record can represent themselves in the post-judgment proceedings or hire a debt collection attorney.

In the state of California, the judgment creditors are owed $815,789,077 in unpaid judgments, second only to New York. This makes California one of the best states to be assigned judgments.

Judgments in California are good for 10 years and can be renewed but can only be renewed after 5 years. If consistently renewed, the judgment remains alive indefinitely.

 

CALIFORNIA CODE OF CIVIL PROCEDURE 673

(a) An assignee of right represented by a judgment may become an assignee of record by filing with the clerk of the court which entered the judgment acknowledgment of the assignment of judgment.

 

PURCHASING THE JUDGMENTS

There are two options when purchasing judgments: either the cash up-front or future-pay methods. 

The cash up-front method is when the assignee owns the judgments. 

The future- pay method means the assignor is still part-owner of the judgments.

1. Cash up-front purchase: The assignee will purchase the judgments with a onetime payment to the assignor. This procedure gives the assignee total control of the judgments. The assignee steps into the original judgment creditor's shoes and can enforce the judgment. Money talks but in the judgment assignment business it swears! The assignee is taking all the risks so that is why the offer to purchase is a small fraction of the face value of the judgments.

Cash up-front purchases range from 7% to 15% of the judgment amount, depending on how collectable the judgments are.

2. Future-pay method: Some states only allow the cash up-front method to purchase the judgments. The future-pay method is more complicated than the cash up-front method because the assignor gets a percentage of all the monies collected until judgment is satisfied. Unlike the cash up-front method where the assignee only pays a percentage  of the judgment amount and solely can collect on the judgment amount, court costs, accrued interest and accruing interest, the future-pay method allows the assignor to collect a percentage of all four. The assignee will still have to pay all the out of pocket expenses related to the enforcement of the judgments unless negotiated differently with the assignor.

The standard percentage of the total judgment, court costs, interest to be presented to the assignor ranges from 20% to 30%, depending on how collectable the judgments are.

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