1

Reduce a debt to a judgment

While forgiveness of unpaid debts is a normal function of any downward business cycle, creditors need to determine whether there is value in reducing the debt to a judgment. That decision must be weighted in terms of what the economic future will bring for the debtor. Just because someone has nothing now, does not mean they never will own anything of value.

2

Reduce a debt to a judgment

Currently, individuals and businesses are all struggling with this present economic downturn. Thankfully, as history has taught us, that trend will not last forever. During the early 1990s recession, many clients we worked with reduced their unpaid debts to judgments, secured those judgments in the counties where the debtors owned property and then patiently waited for the go go, refi 2000's. Going to work in 2000 to 2005 was a blast. We received calls and faxes from title companies on debts almost 10 years old, asking for a pay off demand. That pay off demand included interest on the unpaid sum at a rate of 10% plus collection costs and the checks were sent directly from escrow.

3

Reduce a debt to a judgment

Chasing unpaid monies is an exercise in patience, a little bit of cost, and vigilance on the part of your counsel. At this blip in the business cycle, people are not fighting nor resisting suits to reduce unpaid debts to a judgment. In some cases, after suit is filed, the debtor agrees to stipulate or agree to the judgment, usually under the belief that they will likely never have any meaningful assets to collect.

4

Reduce a debt to a judgment

A judgment when entered in California earns 10% per annum, lasts for 10 years, and is renewable prior to expiration, in perpetuity every 10 years. This results in the doubling of the amount owed on the debt every 10 years. With a little patience, one can eventually recover the sums owed in the future. So reducing the sums owed to a judgment and either recording a lien, or monitoring the debtor's assets for future real estate purchases is productive. Of course, apart from judgment liens, there are other more active means to pursue collection of a judgment, but for the money and right debtor, a judgment lien is the most economical means to obtain eventual payment.