About two weeks ago, we purchased our first cases from a regular American business. To provide more context, all cases are post-judgment and on a payment plan. Retracing the cycle of what happens when an invoice goes unpaid, one can list the following phases:

  1. Dunning/"Amicable" phase: the invoice is unpaid, the number of past-due days increases, and emails and letters are sent.

  2. Litigation phase: a case is brought to court and proceedings are initiated. If successful, they end with a judgment.

  3. Post-judgment enforcement/repayment: once a judgment is secured, the plaintiff has to secure repayment. This is where they can leverage tools such as garnishments, liens, and sheriff-assisted asset seizures. In some cases, the parties agree that the defendant will repay the amount owed in monthly installments.

The cases we purchased are at the last stage: post-judgment with a payment plan. What's more, a portion of that payment plan has already been repaid. Seems like a done deal? So why would anyone sell such cases? What value does Delos provide?

#1 A payment plan ≠ repayment

A payment plan does not automatically guarantee repayment. It means that the total amount will be repaid in installments (usually monthly). The monthly amount will usually be in the low three figures. It's hard to foresee a defendant agreeing to more than $500/month. So for a $10,000 claim value, you might easily be looking at at least 20 monthly payments. In reality, the individual installments could be lower, and full repayment could last 3–4 years. That's a lot of time during which something can happen. People lose jobs. Businesses fail. They file for bankruptcy. They move. They simply stop paying.

#2 Managing payment plans is hard work

Think of your car lease or your phone bill. You get an invoice, pay the same amount every month—easy, right? What most people don't see is the machine behind any monthly payment system. A bank or a phone company will have a big tech stack that helps manage such monthly payments. At best, it includes sending an email every month with the amount due and payment details. But in a lot of cases, more than one email reminder is needed. Also, reminders must be kept on track: there is a difference between sending reminders at regular intervals and forgetting to send one. If someone is not paying, such emails must be escalated, their frequency must be increased, or you must combine them with a text message.

At the same time, you can't just blindly schedule such a cadence. You must check your account to make sure you received the money and aren't sending a useless reminder. Furthermore, if the payer sends you a check to your PO box, you must be on the lookout for it.

Once you have three defendants on a payment plan, you're already in the business of running a full monthly payment plan stack.

#3 Time value of money

This is an obvious one: money today is worth more than money in the future. Furthermore, if you're a business, money usually means a new hire, a business expansion, or some other investment. Most businesses are not in the business of managing payment plans. A construction company wants to build. A software company wants to sell software. A logistics company wants to move freight. Selling payment plans lets management focus on growing the business instead of servicing old receivables.

#4 Accounting and balance sheet cleanup

Long-term payment plans often remain on the balance sheet for years and can complicate your finances. First, there is the work you need to put into them: periodic reconciliations, audits, supporting documentation, impairment testing, and ongoing accounting work. Second, there are taxes you need to pay. If you're using accrual accounting, you already paid tax on the full amount the moment you invoiced. A one-off repayment (even at a discount) allows you to take the loss and deduct it from your taxes.

#5 Your business is more valuable

Finally, there is the value of your business. It is simply worth more with a clean balance sheet. If you're looking to sell it, buyers typically won't pay you for invoices that are 90 days past due—even if they're on a payment plan. Retrieving the amount faster cleans up your balance sheet.

There is also your credit standing. Outstanding invoices can lower your credit rating and make it harder to borrow money. This means your growth plans may slow down.

None of this means selling a payment plan is always the right decision. If the creditor has the systems, the patience, and the capital, holding the payment plan may maximize the total dollars retrieved.

But many businesses don't want to become payment-plan administrators. They want certainty, liquidity, and the ability to focus on their core business.

That's precisely where a secondary market for post-judgment payment plans begins to make economic sense.