10 Things to Know Before Selling a Commercial Judgment in Michigan or Nationwide

Deciding to sell a commercial judgment can significantly impact your financial strategy, especially after a protracted litigation process. However, navigating this sale isn’t as straightforward as one might hope. It is vital to grasp a wide array of legal and financial nuances that determine the sale's success and the final amount you will receive. With judgments arising from various jurisdictions, understanding these ten aspects will empower you to navigate the judgment sales process effectively.

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1. Understanding What Judgments Can Be Sold

Not every judgment is eligible for purchase. Judgment buyers are chiefly interested in non-consumer civil judgments, which arise from business disputes, tenant-landlord disagreements, or contracts—not personal debts related to consumer transactions like credit cards or medical bills. The latter are often governed by strict regulations under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA), which generally make them non-purchasable. Confirm that your judgment fits into the appropriate category before approaching a buyer.

2. The Significance of Judgment Age and Expiration

The enforceability of a judgment is not timeless; each state, including Michigan, enforces a statute of limitations. In Michigan, judgments can remain valid for up to 10 years and can be renewed if they are nearing expiration. A judgment close to its expiry date may require renewal either before or during the sale process. A buyer will evaluate the remaining enforceable period of your judgment before making an offer, which affects what they are willing to pay.

3. The Debtor's Financial Condition is Key to Valuation

Valuing a judgment hinges heavily on the debtor's financial standing. For instance, a $500,000 judgment against a debtor in financial distress with no assets can be practically worthless, while a $50,000 judgment against a debtor with substantial equity may be viewed as a valuable asset. Buyers typically conduct rigorous asset investigations to determine the likelihood of collection. To assess your judgment’s potential worth more accurately, consider obtaining a thorough asset investigation through Wayne Bisard Investigations.

4. Discounts Are To Be Expected

When it comes to judgment sales, expect buyers to make offers below the face value of the judgment. This discount reflects the inherent risks, time commitments, and expenses associated with enforcement. The discount can vary based on the debtor's assets, the jurisdiction of the judgment, its age, and the complexities involved. This process is comparable to selling a receivable; you would accept a lesser amount now to minimize risk and secure immediate payment.

5. Assignment Means a Complete Transfer

Engaging in the sale of your judgment involves executing a formal assignment agreement, which transfers your rights as a judgment creditor to the buyer. Once the assignment is complete, you relinquish all involvement in the collection process and will not be entitled to any future recoveries. This results in a clear-cut transaction that many creditors find attractive.

6. Multi-State Judgments Require Additional Considerations

If your debtor operates in another state or has assets beyond Michigan, you may need to undergo the domestication of the judgment, as outlined in the Uniform Enforcement of Foreign Judgments Act (UEFJA). This additional step can increase both costs and the time needed to finalize the transaction. However, established judgment buyers like Great Lakes Strategic Capital possess the expertise to navigate these complexities efficiently, streamlining the acquisition process.

7. Bankruptcy Can Complicate or Negate Your Sale

A debtor’s bankruptcy filing introduces critical complications that can dramatically affect the value of your judgment. An automatic stay halts any collection efforts during the bankruptcy proceeding. Buyers will assess the debtor's bankruptcy status and the implications of any discharged debts, as a discharged judgment may become uncollectible.

8. Accrued Interest May Enhance Your Judgment's Value

Many states permit statutory interest to accrue on unpaid judgments. In Michigan, for example, the post-judgment interest rate is set by statute, which means that judgments awarded years ago may now carry considerably increased value. Ensure that any potential buyer considers the accrued interest in their offer to understand the true worth of your judgment.

9. Due Diligence Is Essential and Requires Patience

A reputable judgment buyer will not extend an offer immediately. Expect a thorough due diligence process that often spans one to three weeks. During this interval, the buyer will scrutinize debtor assets, analyze court records, evaluate liens, and judge enforceability. This careful evaluation is crucial for both parties to arrive at a fair offer. As a seller, be prepared to provide vital documentation, including the judgment, case number, court records, and relevant debtor information.

10. The Importance of Working with a Reputable Buyer

The judgment buying landscape is not uniform; practices vary among buyers. A trustworthy, transparent buyer will provide a clear written offer and facilitate a straightforward assignment agreement. Great Lakes Strategic Capital, based in Michigan and serving clients nationwide, emphasizes values such as integrity, discipline, and full legal compliance due to its veteran and law enforcement ownership background.

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Are You Ready to Strategize Selling Your Judgment?

Great Lakes Strategic Capital specializes in the purchase of non-consumer civil judgments from creditors across the United States. We handle everything from due diligence and asset investigations to the assignment and enforcement, allowing you to close the file on your judgment and move forward with peace of mind.

If you are interested in assessing the collectability of your judgment prior to making a decision, consider taking advantage of professional asset investigation services by visiting www.wbinvestigations.net.

To submit your judgment for review, go to www.glstrategiccapital.com.

Know your options. Protect your position. Get paid.