Judgment Enforcement

A judgment is only the first step to collecting your money. Whether you have an existing judgment or a judgment DRA has obtained for your company, the next step is to collect the judgment. Most Judgments need to be forced. Judgment enforcement is a specialized area of the law that should be handled by an experienced attorney.

DRA utilizes every judicially available statutory tool to enforce judgments. First, DRA will file a Notice of Entry of Judgment to secure and set the time the Judgment debtor must file an appeal. Then to secure your interests DRA will obtain an Abstract of Judgment and record it with the County Recorder in the county where your judgment debtor operates its business, along with a notice to the California Secretary of State evidencing the lien. Next DRA will file a Writ of Execution, which allows our attorneys to proceed with the enforcement procedures listed below, depending on the type of judgment.

In the event litigation is necessary to enforce your rights to payment, a Judge will issue a judgment in your favor. However, once a judgment is issued, that does not guarantee you get paid. A judgment is a court ruling that states the debtor owes the money. Most Judgments need to be enforced. Judgment enforcement is a specialized area of the law, that should be handled by an experienced attorney.

There are a number of judicially available tools that can be employed to enforce judgments.

First, as Judgment Creditors we will file a Notice of Entry of Judgment to secure and set the time that the judgment debtor has to file an appeal. Then, immediately obtain a Writ of Execution, which then allows our attorneys to proceed with the following enforcement procedures depending on the type of judgment:

An explanation of the some of the most useful levies are:

A Bank Levy

A bank levy or garnishment will be issued by the court upon request. You need to know where the bank account is. The levy typically should be served at the branch where the account is open, not just any branch of the bank. The levy must be delivered by a court appointed organization, which typically is the local sheriff or marshal. Unfortunately, this can mean long delays from the time the court issues the levy to the time it is delivered. You are entitled to any available funds on the day the levy is served. It does not automatically get applied on subsequent days. So, if you are fortunate and there is a lot of money in the account when it is served, then we will get a big payout. But, if on that particular day there are minimal funds, we have to start the process all over again, which can take 3 or more months. Also, if there is a lien on funds in the account by the bank or by the federal or state authority that has a tax lien, then the bank will not seize the funds for our bank levy.

Wage Garnishment

Wage Garnishment can be obtained against any individual who was named on the judgment. This requires the employer to garnish, or hold back, a portion of the employee’s wages and submit these funds to the court on a monthly basis to be paid to the judgment creditor. You have to know where the person works in order for the garnishment order to be sent to the employer. The debt collection attorney needs to go to court and request the garnishment, and after the court agrees the court has to issue the garnishment to the employer. The law limits how much of an employee’s wages can be garnished, based on the concept that the employee needs a substantial portion of his wages simply to pay for food and lodging.

Third Party Levy

If you know who the judgment debtor’s customers are, or where they receive their payment for products or services sold, then capturing the funds before they get to the judgment debtor may be the way to go. This includes merchant accounts. One advantage to this is once served, it is on-going until the judgment is satisfied. This can be a somewhat complicated and time consuming process. It should only be attempted if the creditor believes there is an on-going flow of funds through these different sources.

Keepers

If the judgment debtor has a retail outlet, a keeper can be placed in the store to do a “till tap”. Essentially, this means taking any currency received out of the cash register. The keeper actually appears in the store and can require all customers to pay in cash instead of using checks or credit cards so that the keeper can take the cash. This is an expensive process, although these costs do get added to the judgment and therefore may eventually get recovered.

While one may not recover significant amounts if business is slow or customers are not able to do cash transactions, it often motivates debtors to enter into ‘voluntary’ payment plans. It is uncomfortable to have a keeper in a store and it does not send a good message to employees.

Real Property Liens / Abstracts of Judgments

After obtaining the judgment, an Abstract of the Judgment is obtained from the court and is then recorded with the County Recorder’s office, where the debtor owns property. If the debtor tries to sell or refinance the property, the judgment will come up during the record search. They will not be able to complete the transaction without paying the judgment. The attorneys at Debt Recovery Attorneys can file an Application and Order for the sale of the debtor’s residence.

Debtor’s Exam

The key to doing court ordered judgment collection efforts is having information on the debtor’s assets and income. If we don’t have that, then the first step in the process is to conduct a debtor exam. The debtor is to appear in court with their banking information as well as other information regarding their assets and income so we can get the information needed to do levies, garnishments, etc.

The debt collection attorney has to first schedule the exam with the court, which requires filing fees. Then, the debtor has to be personally served with notice of the exam, whether they are an officer of the company debtor or an individual who has personal liability. If we do not know where the debtor resides or works, then we cannot serve the debtor. There is a charge for each attempt by the process server to serve the debtor, so these costs can add up. If we don’t serve the debtor within the necessary timeframe, then the exam needs to be rescheduled and we have to try to serve the new exam date, again incurring more costs. If the debtor appears in court but does not bring the required information, the exam is continued to another date. This can happen several times, including if the debtor does not appear. So, while we have the court on our side, the debtor can make the process difficult and stretch it out months if not years.

If a debtor repeatedly fails to appear for debtor exams, we can request that the judge issue an arrest warrant. Sometimes we only get a bench warrant, which means the local authorities do not go out to attempt an arrest. Instead, if a person ever is questioned by an officer, for example during a traffic stop, the warrant will appear and off to jail they go. Some jurisdictions will proactively seek to arrest the debtor. There is no prison sentence, but the judge indicates they must appear or there could be additional consequences.