TLDR;
This video explains how to turn a court judgment into actual money. It emphasizes that obtaining a judgment is only the first step and that active measures are required to recover the funds owed. The video advises against relying on collection agencies and instead recommends conducting asset searches and employing retrieval strategies to reclaim what is rightfully yours.
- A court judgment is just a validation of debt, not actual money.
- Active retrieval, not passive collection, is key to recovering funds.
- Asset searches are crucial to identify and seize debtor's assets.
- Debtors often try to hide assets, but persistence can lead to recovery.
Introduction: Understanding the Value of a Judgment [0:01]
Winning a lawsuit and obtaining a judgment, such as a verdict of $182,000 or even a million dollars, is only the initial step toward recovering the money owed to you. The court's judgment is merely a declaration that the other party owes you money, but it holds no monetary value until you convert it into cash. You can't deposit the judgment at a bank or use it to purchase goods or property. The court is simply validating your claim that the other party owes you money.
The Debtor-Creditor Relationship [1:11]
The person or entity against whom you won the judgment is now your debtor, while you are the judgment creditor. This relationship is similar to a bank loan, where the borrower is the debtor and the bank is the creditor. However, unlike a regular loan with a payment schedule, a judgment doesn't specify payment terms. It's up to you, the judgment creditor, to take action and recover the funds.
The Importance of Asset Searches [2:10]
The initial step in recovering your money is to conduct a thorough asset search on the judgment debtor to determine their current assets. While debtors may attempt to conceal assets during a lawsuit, it's still essential to identify what they possess. If they have assets, you can pursue garnishment, writ of possession, seizure, or foreclosure to claim them.
Retrieval vs. Collection [2:48]
It's important to approach judgment recovery as a retrieval process rather than a collection effort. Collection agencies typically make calls and send letters, which are unlikely to motivate a debtor who has already gone through a court case. Collection agencies charge fees and may require you to sign over your rights. Selling your judgment might only get you pennies on the dollar. Instead, focus on actively retrieving the full amount plus interest, which can accrue at a rate of 1% per month (12% per year).
Strategies for Asset Recovery [3:51]
If the initial asset search reveals limited assets, wait six to eight months and conduct another search. Debtors often try to reduce their visible assets to avoid immediate seizure, but they eventually become complacent. Obtain bank statements and trace the flow of funds to uncover hidden assets. Debtors may hide assets in other people's names or use trusts or LLCs to shield them.
Taking Action and Preventing Debtors from Benefiting [4:54]
Don't allow the debtor to evade their obligation. They owe you money because they breached a contract, failed to pay a bill, or caused you harm or loss. View the situation as a temporary holding of your money by the debtor, who is refusing to return it. Focus on recovering what rightfully belongs to you, rather than trying to collect something that belongs to them.
Active vs. Passive Recovery [5:54]
A proper judgment debtor recovery process involves active measures, not passive collection efforts. Collection agents have little to lose by simply making calls, while you need to take decisive action. While asset searching may require effort and expense, it's worthwhile to recover your money and prevent the debtor from benefiting from their wrongdoing. Many debtors assume that judgment creditors won't take action, so don't let them get away with it.
Final Thoughts and Resources [6:40]
Don't let the debtor win again by failing to pursue your judgment. Visit activeintel.com for more information and to schedule a consultation to determine the best strategies for recovering what is rightfully yours. Prevent the wrongdoer from benefiting from your inaction.
