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Judgment Recovery: An Interesting Home Based Business

Updated on February 18, 2010

How to start a Judgment Recovery Business

Even in a tough economy there are still ways in which anyone with the proper motivation and skills can make money from home to supplement their current income with little money out of pocket.

A little known opportunity out there that deserves a good looking into is the judgment recovery business. Judgment recovery is still not regulated and in most states, no special license is required. This business requires having good follow up habits and investigative and organizational skills. Having a good working computer with an internet connection and a few days a week to  spare to spend time at the county clerks office for information gathering may also be required.

Judgment Recovery is the business of finding people who have been awarded a judgment but haven't been able to collect their money and then locating the dead beats who owe them the money and using the laws of your state to recover that money.

The best way to do that would be to start at your local court clerk and go through the small claim files looking for the files where the judgment was unsatisfied. Many counties now have their archives on-line so you may not have to leave your house.   After gathering all the pertinent information such as phone numbers, addresses new and old, drivers licenses numbers, social security numbers and a bit of the case history, you would then send a letter to the person who hasn't been able to collect their money offering your collection services to them for free. "Free?", Yes, free. But how do I get paid? you ask...Well the way you make your money is coming to an agreement with a claim holder which is usually 50% of the money awarded.  When an agreement is made you will be going after the money on your own behalf because the judgment will be in your name.

For example, Let's say you contact Sierra, who three years ago was awarded $5000 by a judge but Max, who is the debtor never paid up.  In fact he never had any intention to pay and Sierra has no clue where Max is. By now though, Sierra probably forgot all about that money that Max owes to her or figured she would never get it. (The courts job is to settle a dispute but they don't help you in collecting the money). Sierra received the letter you sent her and contacts you and the both of you come to an agreement, filling out the proper paperwork.  One to transfer ownership of the judgment and the agreement between Sierra and yourself for the amount that will be paid to her after you collect from Max. The claim is now in your name and you have all the right to collect on it but first you must find Max. This is where you put your investigating skills using skip tracing methods.  Once found, there are a few different ways to collect the money since you now hold the judgment.  You can use wage garnishments, property liens, direct levying and bank account seizures. 

Let's say you find out that Max holds a bank account. So you file the proper paper work for a bank seizure and after securing the $5000 originally owed to Sierra but now owed to you, you call Sierra and tell her you have a check for $2,500 for her. She's happy she finally got paid something and you're ecstatic because you just got paid for your hard work.

Small claims vary from state to state, but they generally cap out from three to five thousand dollars. This means that they can provide great income. As mentioned before Judgment Recovery specialists usually take a commission of about 50% of what is owed plus any interest that has acummulated.

There are many Judgment Recovery Courses available online for under $200 with great online resources. Although any person holding a judgment may go out and do the work themselves of recovering the money they usually don't. In fact more than 80% of small claim judgments go unsatisfied. So there is a vast amount of work to be done out there. This is still a greatly undiscovered niche that has a lot of potential for someone willing to put in the leg-work. If you enjoy investigative work, you might find that Judgment Recovery can be a good home based business that is both fun and rewarding.


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    • Treasuresofheaven profile image

      Sima Ballinger 7 years ago from Michigan

      SugdorZ, I started a Judgment Recovery Business years ago, and you are correct. This is true information. If you are good at skip tracing and locating people, this could be good for you. You can sign on with a skip tracing company to help you locate people. I had someone's wages garnished and didn't feel comfortable with it - so I immediately got out of that business.