Ways To Run A Judgment Collection Company
I am not a lawyer, I am a judgment valuation expert (Judgment Broker) and this article is about how to operate a judgment enforcement to recover court judgments. Judgments are not simple debts, they are final orders from a court. As laws and courts do not assist people (or make it easy to) recover judgments, and because judgment recovery requires experience and/or cash - most people require assistance in recovering their judgment money.
The challenge of enforcing the majority judgments has started a huge (always growing and changing) judgment recovery business. People and companies that enforce judgments are categorized Judgment Enforcers (JEs). JEs include typical people, process servers, Private Investigators (PIs), lawyers, collection agencies, and companies which employ and/or hire PIs and attorneys.
Most JEs are not lawyers, they are educated people that study, learn civil laws, and practiceprocedures. Most get judgments assigned directly to them, so that they become the legal owner of the judgment, and can then enforce it by representing themselves (a Sixth Amendment right) in post-judgment recovery procedures in court.
In most courts, a corporate entity may not represent themselves in court. For that reason, and several other reasons, most JEs do not form corporate entities. However, some JEs do form corporate entities, as discussed below.
Some states and courts are hostile to pro pers (propria persona, Latin for those representing themselves in court) recovering judgments they now own, but did not own own originally. In certain courts, non-lawyer judgment recovery specialists are denied their Sixth Amendment rights to recover judgments they own.
How can you operate a judgment recovery business in hostile courts or states? Some of the answer depends on having a reserve of start-up money, which is nice to start with when you start any business. Judgment enforcement is a business that often operates at a loss for several months (or more).
To begin a Judgment Recovery business anywhere, even in a location or court hostile to your (6th|Sixth) Amendment rights, you should have an office, and hire lawyers (to sign all documents and appear in court) and PIs (to do skip-tracing and asset searches). You also may want to create a corporation or LLC, which is now an option, as you will not be appearing in court. Setting up a Judgment Enforcement business as a corporate entity is a more costly way to start and run a JE business.
With a corporate entity, it's going to be more costly for each judgment collected. You have to share your (e.g.) 50% possible gross profit with the attorney and Private Investigator, for office rent, etc. However, now you can spend your time finding more business while your lawyer and Private Investigator do much of the difficult work. You may prefer to work your Judgment Enforcement business this way, instead of doing it all yourself.
You can be a sole proprietor, or form your own corporate entity, and be an officer or employee in your own company. You become the manager and get judgment leads and screen them. You might choose to take assignment of judgments in your name, or not, it's your decision.
If you take the assignment, you own the judgment, and your lawyer works on your behalf. The lawyer must be authorized to practice law in the state where the debtor's assets are located. In this way, you are not doing any collections yourself, so I assert you can collect in any state. If you do not take assignment of the judgment, the Original Judgment Creditor (OJC) remains the owner of their judgment and "your" lawyer represents the OJC to recover their judgment. You need to work out an agreement with either the OJC and your lawyer (or both), to make sure you will be paid for being the manager and making possible the magic (the OJC getting some or most of their judgment money back) happen. If you can find the right lawyer, willing to work for you, you can bypass collection agency laws and hostile states and courts as you are never going to show up in court or communicate with the judgment debtor.
To run a judgment recovery business this way, you must find the right lawyer which may take some time. If you do most of the tedious planning and background work, and talking with the OJC, you may be able to persuade an attorney to discount their rate for you. I am not an attorney, and you should ask a lawyer if my advice in this article is correct in your County and State.
About the Author
Mark D. Shapiro - Judgment Referral Expert - http://www.JudgmentBuy.com - where Judgments go to get Purchased or Enforced! We save you money and time.
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