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Judgment collection agency vs. selling your judgment
Short answer: A judgment collection agency usually works on contingency: you keep the judgment, it tries to collect, and it keeps a share of what it recovers. Selling the judgment gets you cash now, and the buyer takes the collection risk and any upside. Choose the agency when the debtor clearly has reachable assets and you can wait. Choose a sale when you want certainty or the debtor is hard to collect from.
How do the options compare?
| Contingency agency | Assignment for collection | Outright sale | |
|---|---|---|---|
| Cash up front | No | Usually no | Yes |
| Who owns the judgment | You | Assignee of record (per contract) | Buyer |
| How you are paid | Collections minus the agency's fee | Your contracted share of collections | Purchase price at closing |
| If nothing is collected | You get nothing | You get nothing | You keep the price |
| Upside if the debtor pays in full | Most of it is yours | Shared per contract | Goes to the buyer |
| Court filing | Usually none to change ownership | Assignment filed with court | Assignment filed with court (e.g. California Judicial Council form EJ-100) |
| Ongoing involvement | Some: approvals, costs, updates | Low | None after closing |
Contingency agency
- Cash up front
- No
- Who owns the judgment
- You
- How you are paid
- Collections minus the agency's fee
- If nothing is collected
- You get nothing
- Upside if the debtor pays in full
- Most of it is yours
- Court filing
- Usually none to change ownership
- Ongoing involvement
- Some: approvals, costs, updates
Assignment for collection
- Cash up front
- Usually no
- Who owns the judgment
- Assignee of record (per contract)
- How you are paid
- Your contracted share of collections
- If nothing is collected
- You get nothing
- Upside if the debtor pays in full
- Shared per contract
- Court filing
- Assignment filed with court
- Ongoing involvement
- Low
Outright sale
- Cash up front
- Yes
- Who owns the judgment
- Buyer
- How you are paid
- Purchase price at closing
- If nothing is collected
- You keep the price
- Upside if the debtor pays in full
- Goes to the buyer
- Court filing
- Assignment filed with court (e.g. California Judicial Council form EJ-100)
- Ongoing involvement
- None after closing
When does a collection agency make sense?
- The debtor has a known employer, bank account or real estate, so enforcement tools (writs, levies, garnishment, liens) are likely to work (California Courts Self-Help describes these tools).
- You can wait months or longer to be paid.
- You want to keep most of the upside on a strong judgment.
- The judgment has plenty of enforceable life left.
When does selling make sense?
- You want a certain amount now, or need to close the file (for example, a business winding down or a landlord clearing old judgments).
- The debtor is hard to locate or has few visible assets, and you would rather move the risk to a buyer.
- You hold many small judgments and want one transaction instead of many placements.
- Previous collection attempts failed and you do not want to fund more court costs.
What should you ask before signing?
- Is this a purchase, an assignment for collection, or a contingency placement?
- What is the fee or price, and who pays court and filing costs?
- Is there an exclusivity period, and can you terminate?
- Is the company licensed where the debtor is, if the state requires it? (Consumer debt also brings FDCPA duties, 15 U.S.C. § 1692a.)
Ready to compare? See judgment buyers, the pillar guide to selling a judgment, or selling debt vs. contingency for other debt types.
What else do sellers ask?
Do judgment collection agencies buy judgments?
Some do, but many work only on contingency, keeping a percentage of what they collect. Others take an assignment for collection. Ask whether an offer is a purchase or a placement.
What does a judgment collection agency charge?
Contingency fees are set by contract and vary with the judgment's size, age and difficulty. There is no standard rate, so get the fee, cost responsibilities and termination terms in writing.
Who owns the judgment if I use an agency?
On a pure contingency placement you stay the judgment creditor. On an assignment for collection the agency usually becomes assignee of record under the contract terms. On a sale the buyer owns it outright.
Can I switch from an agency to a sale later?
Usually yes, if your agency contract allows termination. Check for exclusivity periods or fees owed on later recoveries before you sign.
Does the FDCPA apply?
It applies to consumer debts (personal, family or household) and to third parties collecting them, under 15 U.S.C. § 1692a. Judgments on business debts are generally outside it, though state laws may still apply.
Have a judgment to sell? Send the basics (court, date, amount, debtor type). No consumer personal data is needed at this stage, and we sign a mutual NDA before anything detailed is shared.