Via William Mencarow at PaperSourceOnline.com’s free “paper” course.
THE TRUTH ABOUT BUYING JUDGMENTS
By AnonymousCollecting judgments is very difficult.
I should know, I do it for a living.
It is much more complicated than these judgment courses would havyou believe.
First, you need a way to find the judgment holders.
Second, you need to market your services and have the judgment holder sign an “Agreement of Assignment.”
Third, and most importantly, you need to find the debtor and his/her employer. This is where the really difficult part starts.
We start by finding a Social Security number on the debtor through a online database we subscribe to. The original judgment holder hardly ever has this. Then we take that and do an address update to locate the current location of the debtor. Then we send out “pretext letters”*
that hopefully generates a call to our “trap line” which identifies the location of their call (during business hours it identifies their employer). Then we contact the debtor to work out a repayment
plan. If they blow it off, we garnish their wages.This business is a total numbers game. Out of every 100 judgments we market for (usually send out letters to, say, 20 judgment holders that have 5 judgments apiece), we will only get 3.6 debtors to repay us.
The math is as follows:
We market for 100 judgments every day. With a 20% direct mail response, we pick up 20 judgments every day. (We refined our marketing approach which took over a year). Once we have the 20 judgments, we will find a Social Security number for 75% of the debtors. Now we are down to 15.
We take these 15 Social Security numbers and get a good and usable address for the debtor 60% of the time. (Remember, these are people who are many times hiding from their creditors). Now we are down to nine.
We send out a pretext letter to the nine which basically induces an action from the debtor, i.e. a phone call for a new credit card or found money. They call into a special 1-800 line, called a “trap line” which always identifies the number the debtor calls from, even if they block their
number, or even if it says “Private Caller”, “Out of Area”, or “unavailable” like standard consumer Caller ID.(Editor’s note: I don’t endorse lying, which is what “pretext letters” are. There are ethical ways to collect debts.)
We have them call this number between 11:00 a.m. and 3:00 p.m. so they hopefully call us from their place of employment. We have therefore “trapped” their number which has identified their employer.
We get a 40% response from these pretext letters inducing a call to the trap line. We are now down to 3.6 debtors that we call for repayment. If they will not repay, we garnish.
I am not trying to scare anyone off. I am just warning you that this is a very difficult business and takes a lot of refining and adjusting to find out what works.
I hope none of you reading this wastes your money on one of these courses like I did. Nothing I currently do today that is successful was learned from these courses.
Business Opportunities Weblog Brasil | Grandes Links Para Negócios Trabalhe em Casa on January 19th, 2006 at 11:33 am
[...] A Verdade Sobre Comprar Julgamentos (The Truth about Buying Judgments) [...]
floebooksinfo.com on August 11th, 2006 at 6:24 pm
After reading this article, I am half way tempted not to start my judgement recovery business. I think it depends on what company you chose. As with any business, it will take a lot of hard work to be successful. Why would you write such an article if you are doing this business?
ramon on October 3rd, 2006 at 5:07 pm
what about child support business is that a good one to get into or commercial judgement collection?
MR. X on March 7th, 2007 at 5:24 pm
In my state, the debtor has to fill out a financial disclosure form, including where they work, bank accounts, and so forth. If they fail to do so, they are in contempt of court. Bench warrant is issued. If a cop runs their plates whilist they drive, they are pulled over and arrested until such time as they fill out the financial disclosure. Best advice for judgment buyers. Buy from individual creditors or small businesses and only against debtors that own real estate. That will help you buy cheap (15% of the judgment amount) and increase collectibility, 20% of homeowners sell or refinance on an annual basis. By do nothing, your portfolio can expect to collect 20% + interest. With aggressive collection work, you can double that to 40%. No BS. Its hard work. You have to use expensive software such as lexis-nexis, and you have to use ethical staff. Attorney generals live to punish debt collectors.
cheers.
Make Money From Home on May 11th, 2009 at 12:13 pm
Timeless post. Work from home opportunities require you to kiss a lot of frogs
Thanks.
Judge Judy on October 27th, 2009 at 11:01 am
This is something that extremely few will ever make any real money at. Many courts will not give any personal info on the person owing the debt. Often the person due the money does not have that type of information. You will spend many man hours tracking someone down and you still won’t get any money out of them. I think you’d make more money working at a fast food job and probably spend less effort.
RESynod on October 27th, 2009 at 11:54 am
Dear “Judge Judy” , you’re probably right. Most people would make more money working at a fast food place. Of course that’s true at most businesses. Some will not put forth the effort! That’s why things like this can be a viable option for a few when they know which type of accounts they may be able to collect on.