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The Four Top Reasons Why “Slam Dunk” Judgments are not collected!



L When the judgment debtor is rich, and the judgment has no defects (e.g., naming the judgment debtor(s) incorrectly, or a questionable proof of service), that is known as a "slam dunk" judgment. Slam dunk judgments are not always recovered, the top four reasons why:

1. The judgment debtor has hidden their assets, or has taken advantage of laws to shield their assets. The classic example is a fraud who swindled someone out of their money, and then invested or converted their victim's money in their big, exemption-protected home in California.

2. The judgment debtor might choose to spend $100,000 on lawyers to fight a judgment recovery effort, rather than spend $20K to pay off or settle a judgment.

3. The judgment debtor might hide most of their assets, and then file for bankruptcy protection, just to thwart all creditors.

4. The judgment owner might be too over-optimistic and stubborn, with a false belief about how easy their judgment's recovery appears to be. Even when judgments are "slam dunks", it costs money to recover them, and results are not guaranteed. If a judgment owner is not willing to share a significant part of what might get recovered on a contingency basis; or is unwilling to sell their judgment at a steep discount, their judgment may never be recovered.

"The richer a judgment debtor is, the more likely it is that they are already using asset protection techniques. Discovering and undoing fraudulently transferred or hidden assets is very time intensive and costly, and there is no guarantee of success. And, the laws generally protect fraudulent asset transfers after just a few short years. Recovery of any judgment costs time and money and is usually a hassle.”

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