Why Trustees and Receivers Should Sell Default Judgments

Default judgments can be among the hardest assets in a bankruptcy estate to turn into money. They are time consuming and bog down the business of the estate. But they don’t have to sit idle. Selling them to a professional buyer like SLFAQ, LLC to maximize value for creditors

Collecting on a judgment is rarely straightforward. There’s a reason you obtained a default judgment in the first place.  The judgment debtor typically doesn’t have the money to pay an attorney.  So they default.  And there you are, left with paying hourly fees to obtain the judgment but zero recovery.  Enforcing judgments requires locating debtors, garnishments, liens, and years of follow-up—with no guaranteed result. For trustees and receivers , these assets often end up sitting idle, delaying case administration.

​​Why Judgments Are Left Behind in Estates

Did you know that 80% of commercial judgments go uncollected?   One trustee recently told us that his counsel pursued all parties who received over $25,000 in preference payments but left the estate with over 30 uncollected default judgments aggregating $10 million dollars.  However, in order to close out the estate, he needed to administer those judgments. He told us that he categorized the judgments as follows:

• Difficult Enforcement: Locating debtors, uncovering assets, and initiating garnishments or liens can take years.
• Low Success Rates: Many judgment debtors are insolvent, evasive, or simply uncollectible.
• High Costs: Legal fees, enforcement expenses, and ongoing trustee oversight can outweigh any potential recovery.

The result? The Trustee sold us a basket of judgments.

The Case for Selling Judgments

Instead of letting judgments sit idle, trustees can sell judgments directly to established judgment buyers. This process unlocks hidden value while protecting the estate from risk.

Benefits of Selling Judgments

• Immediate Cash Value: Convert paper assets into real, distributable dollars without delay.
• Risk-Free for the Estate: No legal battles, enforcement costs, or years of follow-up.
• Faster Case Closure: Streamline administration and move more quickly toward final distribution.
  Fiduciary Responsibility: Demonstrate prudent asset management by maximizing net recovery for creditors.

For trustees, selling judgments is a straightforward way to ensure assets are not wasted—even when collection might be theoretically possible.

Why Work with a Professional Judgment Buyer

Professional judgment buyers like SLFAQ specialize in assessing, valuing, and purchasing these hard-to-collect assets. By transferring ownership, trustees avoid the burden of enforcement while still generating value for the estate.

SLFAQ’s experience in judgment liquidation means trustees can trust that the process is efficient, compliant, and aligned with their fiduciary duty to maximize creditor recovery.

Unlock Hidden Value in Your Estate

Judgments don’t need to sit idle. By selling them to a professional buyer, trustees and receivers can recover immediate value, save time, and close cases faster—all while ensuring creditors benefit from assets that might otherwise be abandoned.

Interested in selling judgments from your estate?
Contact SLFAQ today to learn how we can help you turn unsold judgments into real cash value.

‍