DISHONORED CHECKS

General Litigation


The Law States a Person who Passes a Bad Check on Insufficient Funds shall be Liable to the Payee for Treble the Amount of the Check up to $1500.00 Plus the Amount of the Check in Damages


It permits creditors to collect up to an additional $1,500.00 in treble damages on bad checks issued by debtors to creditors. To be able to collect this amount the creditor must mail a certified letter of demand to the person who passed the check and the letter must inform 1) of the provisions of the section under which demand is made and 2) the amount of the check. The debtor has 30 days thereafter to make restitution of the original check and failure to do so will result in liability for treble damages.

UNFAIR DEBT COLLECTION

General Litigation


Debtors are by Law Protected against Unfair Conduct by Creditors who can be Liable for Collection Torts if they are Overly Aggressive in their Collection Activities. Don't engage in the following collection activities that could result in liability for unfair debt collection practices


  • Call before 8 am or after 9 pm, unless you are aware that the debtor works during those hours. If they work nights, you should not call during the daytime hours (hours of sleep).
  • Contact the customer outside regular business hours.
  • Cause a phone to ring repeatedly so as to annoy the person called.
  • Place phone calls without disclosing your identity.
  • Cause expense to a debtor for long distance telephone calls, telegrams, or other communications, by misrepresenting the purpose of the communication.
  • Record a telephone conversation without the other party’s consent, (substantial civil penalties may also be imposed when a telephone conversation is surreptitiously recorded, and moreover, the recording is generally not admissible in court).
  • Communicate with anyone, but the debtor about the nature of the communication (you may however, communicate with a debtor’s spouse, if legally responsible, debtor’s attorney, a court appointed guardian, or parents of a minor).
  • Represent that you are anybody other than who you are, that is, you may not represent yourself as an attorney, a collection agency, the “legal department”, and so forth.
  • Use or threaten to use physical force.
  • Use obscene language, threaten, shout at, or argue with the debtor.
  • Threaten criminal prosecution to recover a debt or otherwise settle a civil dispute.
  • Make public statements about the customer’s credit problems or moral character.
  • Threaten garnishment or attachment of wages, or seizure or sale of property unless an action that would result in those activities is permitted by law and is in fact, contemplated by the debtor collector (that is, if you threaten to sue, you had better sue).
  • Communicate with employers, unless you have prior written consent from the debtor (you may write to an employer to verify employment). However, contact with the debtor at his place of employment is permissible, but, all contact must stop: at the debtor’s request; if you know or are told that the employer forbids contact; or if you know contact at work is inconvenient.

STATUTE OF LIMITATIONS

General Litigation


A Law Establishing the Time Limit in which a Lawsuit must be Brought is called the Statute of Limitations


Different types of cases have different statutes of limitation. Knowing which statute of limitation applies is critical, since if a lawsuit is not brought within the time limit that applies to the case, the right to sue and recover damages is forever lost.

The statute of limitations is usually relatively short and subject to a number of factors.

However, there are also different exceptions that may apply to each type of case, which may extend the statute of limitations.

Of course, regardless of the possible availability of an exception, it is always beneficial to bring a lawsuit as soon as it is practical to do so, since the availability and memory of witnesses and related physical evidence is much greater shortly after the incident than after years have passed. It is critical that you contact an attorney immediately after suffering a loss so that the appropriate statute of limitations can be determined.

At the Law Offices of Ivan P Cohen we make sure to explore all aspects of your case as soon as possible to ensure that no claims are lost as a result of untimely action.

SERVICE OF PROCESS

General Litigation Topics


Service of Process is the Act of Delivering a Lawsuit to a Person or Entity Ordering that Person or Entity to Appear in Court on a Date and Time to Answer the Claim of a Creditor


Due process requires that every person be given notice and an opportunity to be heard. There are several methods of accomplishing service of process

Personal Service

By any person over the age of eighteen years who is “not a party to the action”, (for example, someone who is appearing as a witness - a relative or employee would most likely be considered a “party to the action”). A professional process server may be employed. The court does not recommend one, but they may be found listed in the yellow pages of the telephone directory under “process serving”. The lawsuit may be sent to the sheriff’s department in the area where the defendant lives or works, who will have it served by a deputy.

Substituted Service

This method allows service of process upon an individual other than the defendant. In order to have valid service with this method, the person effecting service of process must leave a copy of the papers at the defendant’s residence, business, or usual mailing address (U.S. P.O. Boxes excluded) with a person over the age of 18 and who appears to be in charge at that moment. The person effecting service should obtain the name of the person being served and explain the documents. Thereafter, the person effecting service must mail another copy of the same documents served by regular first class mail, postage prepaid, to the defendant at the same address which the documents were served at. Substituted service is not complete until 10 days after the copy of the claim was mailed. A proof of service must be filed with the court clerk and must indicate the name of the person served.

JUDGMENTS

General Litigation


A Judgment is an Oral Statement by a Judge which Becomes a Court Order when Reduced to Writing by the Clerk of the Court


It declares that a moral obligation created between two parties arising form of a sale of goods or services may be legally enforced by the prevailing party against the losing party, and the effect of which is that it may be so enforced by the many different post judgment remedies.

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. 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.

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.

Renewal of a Judgment

It is possible that a judgment will still be unpaid after five years. A creditor can renew the judgment by serving on the debtor and filing with the clerk a form called an application for renewal of judgment. A creditor must wait at least five years (but never more than 10) before renewing otherwise the judgment will automatically expire at the end of 10 years, after it was awarded. As soon as the judgment is renewed, interest accrues on the entire judgment, including accumulated interest and costs, at the rate of 10 percent per year.

Satisfaction of Judgment

Upon full payment of the judgment, the creditor must file a satisfaction of judgment with the county recorder’s office(s) releasing any liens recorded. This satisfaction of judgment must be filed after full payment is received and after written demand by the judgment debtor. Any creditor who fails to file an acknowledgment of satisfaction of judgment” with the court is liable to the debtor for all damages sustained by reason of such failure, such as losses resulting from the other person’s inability to obtain credit (if the judgment against the debtor was recorded on his or her credit record). Once a creditor signs an acknowledgment of satisfaction of judgment form, he/she gives up your right to collect anything more on the judgment.

There is an exception, where a real estate escrow or title insurance company may request a signed acknowledgment form in advance, with the clear agreement and understanding that the escrow or title insurance company will pay the entire unpaid judgment (including all accrued interest and court costs) from the proceeds of a sale of the debtor’s property.

WRIT OF ATTACHMENT

Provisional Remedies


A Writ of Attachment Allows an Unsecured or Under Secured Creditor to Obtain a Judicial Lien Against the Debtor’s Property or have the Sheriff Seize and Hold the Property until Trial thereby Exercising some Control over the Property before Judgment. The Debtor is Prevented from Selling, Transferring or Encumbering the Attached Property Until the Case is Resolved


Requesting a Writ of Attachment

A creditor must submit a written application and supporting documents to the court when, or after, the complaint is filed. The court will decide whether to issue a writ of attachment at a hearing, which is generally held at least 15 days (longer in federal court) after copies of the creditor’s application papers are served on the debtor. The debtor normally has an opportunity to file opposition papers five days (longer in federal court) before hearing. In determining whether to grant an application for a writ of attachment, the court will look at two issues: (1) whether the creditor is asserting the type of claim for which writs of attachment are available; and (2) the probable validity of that claim. Writs of attachment are only available for claims which are: based on a contract, express or implied; unsecured or under-secured by real property; and for a fixed or readily ascertainable amount in excess of $500. A creditor can only obtain a writ of attachment against an individual debtor if the debt arose out of the individual’s trade, business or profession. This special requirement does not apply when a writ of attachment is sought against corporate debtors, etc.

Probable Validity of a Claim

In order to establish the probable validity of the claim declarations must generally be filed with the attachment application. A declaration is a written statement by a witness signed under penalty of perjury. For writs of attachment, the declarations must establish that there was a contract with the debtor (or that goods were sold to the debtor, etc.), that the debtor failed to make the required payments, the amount of the debt, the absence (or diminution in the value) of real property security, etc. Documents, such as the underlying contract, purchase orders and invoices are often attached to the declarations as exhibits. We often ask our clients to prepare a statement listing the debtor’s payments, the amount of accrued interest and the amount of the total indebtedness.

Ex-Parte

In certain extraordinary circumstances, the court will grant an application for a writ of attachment on an ex parte basis, with little or no notice to the debtor. To obtain a writ of attachment on an ex parte basis, the creditor must either establish that there is a danger that the assets will be concealed if notice is provided, or that the debtor is generally not paying its undisputed debts. It is generally very difficult to obtain a writ of attachment on an ex parte basis. When a court is unwilling to issue a writ of attachment on an ex parte basis, it will sometimes issue a temporary protective order (“TPO”). In a TPO, the court orders the debtor not to sell or transfer certain assets except as permitted in the TPO. The TPO generally remains in effect until the application for a writ of attachment can be heard on a noticed basis.

Bond

Before the court actually issues a writ of attachment, an undertaking or bond must be filed with the court. The amount of the bond is generally between $2,500 and $7,500. These bonds can generally be obtained from private companies for a small fee. In the case of foreign businesses, bonding companies generally require a cash deposit for the full amount of the bond. In those cases where a cash bond is not required, the bonding company will require a financial statement from the client. Any deposit (but not the fees) provided to a bonding company is returned when the case is settled or the creditor prevails.

Levy

To obtain the attachment lien, the writ of attachment must be levied on the debtor’s property. Levy of the writ of attachment is performed by the sheriff or marshal or - for certain types of property - a registered process server (who is paid directly by the credit grantor) should be employed to perform the levy since they are more responsive (but more expensive) than the sheriff or marshal. The method of levy required varies depending upon the type of property being seized. In the case of a bank account, for example, the process server need only deliver certain papers to the bank branch where the account is located. For other types of property, levy of the attachment can be much more complicated and expensive.

Wrongful Attachment

Because of the danger of liability for wrongful attachment, a writ of attachment should only be sought when the creditor has a strong claim. If a creditor loses at trial after it has levied its writ of attachment against the debtor, it will be liable for statutory wrongful attachment and may be liable for common law wrongful attachment. Likewise, if a creditor attaches property which cannot lawfully be attached, it may also be liable for wrongful attachment. If the debtor can prove damages, the creditor will forfeit its bond. A creditor may also be liable for damages caused by the debtor’s loss of the attached property when a wrongful attachment occurs. A writ of attachment can also precipitate a bankruptcy filing. A debtor faces the loss of essential assets, such as the use of its bank accounts, when a creditor obtains a writ of attachment. Without the use of these assets, the debtor may have no choice but to file for bankruptcy. Often, however, a writ of attachment does nothing more than hasten the bankruptcy filing. The writ of attachment simply forces the financially distressed debtor to take a realistic view of its situation earlier than it would have otherwise. Moreover, bankruptcy does not automatically preclude recovery from the debtor.

Benefits

The risk of wrongful attachment or threats of a bankruptcy should not automatically deter a creditor with a strong claim from seeking a writ of attachment. In many cases, an attachment is essential to ensure that assets will still be available when the creditor ultimately obtains a judgment. In addition, a writ of attachment encourages early settlement. Faced with the potential loss of working capital, many debtors seek an early settlement when they realize that the alternative is the loss of their payroll account or other essential assets.

WRIT OF POSSESSION

Provisional Remedies


A Writ of Possession Permits a Secured Creditor to Exercise Control over a Debtor’s Asset Before Judgment


When a debtor defaults on a secured loan, the creditor generally has the right to recover and sell the collateral to raise money to satisfy the debt. If the debtor can recover the collateral without breaching the peace, it can exercise its right of self-help and take the property without involving the courts (e.g., repossession of equipment). On the other hand, if the creditor is unable to recover the collateral without breaching the peace (i.e., almost any resistance by the debtor), it must file suit against the debtor and commence claim and delivery proceedings. If these claim and delivery proceedings are successful, the court will issue a writ of possession

Requesting a Writ of Possession

A creditor must submit a written application with supporting documents to the court after the complaint is filed. The court will decide whether to issue a writ of possession at a hearing, which is generally held at least 15 days (longer in federal court) after the debtor is served with copies of the debtor’s moving papers. The debtor normally has an opportunity to file opposition papers five days (longer in federal court) before the hearing.

Ex-Parte

In certain extraordinary circumstances, the court will grant an application for a writ of possession on an ex-parte basis, with little or no notice to the debtor. To obtain a writ of possession on an ex-parte basis, the creditor must either establish that there is a danger that the collateral will disappear, loose substantial value, or perish (e.g., the collateral is fresh produce) if the court delays issuance of the writ of possession until after a noticed hearing. The court can also issue a writ of possession on an ex-parte basis to help a creditor recover a credit card in the hands of a debtor.

When Available

To obtain a writ of possession, the creditor must establish that it is entitled to possession of the property. In the case of a secured creditor, this requirement is generally met by establishing that the debtor has defaulted on a secured obligation with declarations submitted by the creditor or its employees. If the collateral sought is located on private property - which is almost always the case - the creditor must also establish the location of the collateral.

Bond

Before the court will issue a writ of possession, the creditor must post a bond in an amount which is equal to two times the debtor’s interest in the property. If, for example, the collateral is worth $100,000 and the amount of the debt is $70,000, the creditor is required to post a bond in the amount of $60,000 (i.e., twice the amount of the debtor’s equity of $30,000 in the property). Because of this requirement, the creditor should try to obtain an evaluation of the collateral’s worth before seeking a writ of possession. The sheriff will generally hold the collateral for a period of approximately two weeks, during which time the debtor can recover the property by posting a bond equal to the credit grantor’s bond. If no bond is posted during that time, the creditor can take possession of the collateral.

Levy

Most sheriffs will not take any action to recover the property unless the creditor first pays levy fees to cover the cost of the repossession of the property. These fees vary depending upon the type of property involved. If the property is small and easy to move, the fees probably will not be too high. If the property is delicate, large, or difficult to move, the fees could be high.

Risks

If a creditor wrongfully obtains and levies upon a writ of possession, it could be liable for substantial damages. Such damages could exceed the amount of the bond. For this reason, a writ of possession should only be sought when there has been a clear breach by the debtor. For many sheriffs, enforcement of writs of possession is a very low priority. In certain counties, the local sheriff’s department will wait several weeks before it enforces the writ of possession.

Benefits

On the other hand, the order for issuance of the writ of possession generally also orders the debtor to surrender the collateral to the sheriff. Many business debtors will surrender the collateral once the creditor applies for a writ of possession rather than risk the embarrassment of having a deputy sheriff come to their premises and forcibly remove property.

POST JUDGMENT REMEDIES

Post Judgment Remedies


A Judgment Creditor is Legally Authorized by the Court to Seize and Sell Assets of the Debtor to Satisfy Payment of the Judgment


Judgments are not self-executing. Once a judgment is obtained against a debtor, the creditor must actively seek to enforce the judgment to collect any money due.

A judgment is payable immediately upon entry unless a definite time is specified by the court when judgment is rendered. Payment of the judgment (principal plus costs) is to be made directly to the party in whose favor it was rendered (judgment creditor), unless ordered by the court to pay directly to the court.

These post judgment remedies permit the judgment creditor to compel payment by levying on the assets of the debtor which include, real property judgment liens, personal property levy, bank levy, wage garnishments, till taps, sheriff keepers, and inventory and equipment seizure. Debtors may be ordered to court to submit to questioning about financial status and disclosure of assets. Non compliance could result in arrest and imprisonment.

Creditors arrange with the sheriff or marshal to seize the assets of the judgment debtor, which have been identified as his/hers and traced to their current location and sell the assets at a judicial sale, by way of public auction. The levying officer thereafter pays the proceeds derived from the sale, after deduction of expenses to the creditor, through his attorneys, in satisfaction of the judgment awarded in his favor, by the court in the amount of the judgment.

JUDGMENT LIENS

Post Judgment Remedies


A Judgment Lien is a Court Order, Issued by the Clerk of the Court that Entitles the Creditor to Create a Lien Against the Judgment Debtor’s Real or Personal Property


As a general matter, a creditor should record the appropriate judgment liens as soon as possible after judgment is entered. Judgment liens generally do not immediately disrupt the debtor’s business and thus are less likely to precipitate a bankruptcy filing than other enforcement devices. Moreover, the sooner the judgment lien is recorded, the less likely it will be set aside as a preference should the debtor ultimately file bankruptcy.

In California, a judgment lien can also be forever. A judgment lien is a court ordered lien that is placed against property when the owner fails to pay a debt. The judgment lien on the property must be paid before the property can be sold. 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.

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.

Abstract of Judgment

An abstract of judgment is a court order which is issued by the clerk of the court and entitles the creditor to create a lien against the judgment debtor’s real property.

The abstract of judgment must be filed with the county recorder’s office in the county(s) where the creditor placed the lien. By recording an abstract of judgment with the county recorder, a creditor obtains a lien against any property owned by the debtor in that county.

Because abstracts of judgment are relatively inexpensive (at least when compared to other enforcement devices), it is recommended to record abstracts of judgment in the county where the debtor currently resides, and any county where the debtor is believed to own property, and all contiguous counties.

If the creditor knows the debtor’s social security number or driver’s license number, this information should be included on the abstract of judgment. If a creditor has such information (or if such information is in the judgment creditor’s files) and it is not included on the abstract, the abstract is void. More often than not, judgments are satisfied when the debtor sells or purchases any real property in the county where your lien is recorded.

Personal Property

A judgment lien against personal property (“JLPP”) is similar to a UCC-1. It creates a UCC-1 like lien against accounts receivable, inventory and equipment. Because of its relatively low cost, it is recommended that a JLPP be recorded with the secretary of state in almost all cases.

WRIT OF EXECUTION

Post Judgment Remedies


A Writ of Execution is a Court Order, Issued by the Clerk of the Court that Authorizes a Levy on the Debtor’s Assets to Satisfy the Judgment


Once the creditor knows about the existence and location of some property of the debtor, it may be time to try to enforce the judgment against the debtor’s property by using one of the available court procedures. To actually seize tangible personal property owned by the debtor, a writ of execution must be obtained from the court.

Requesting a Writ of Execution

This document directs the levying officer (marshal, sheriff, or constable) to take certain assets of the debtor to satisfy the judgment. A writ of execution is issued by the clerk of the court and it is good for 180 days from the date of issuance and during this period, any number of enforcement procedures can be requested. The writ of execution must be addressed to the levying officer of a particular county. Therefore, it is necessary to know the name of the county in which the debtor’s employer, bank, business, or other property is located. If the debtor has property in several counties, it may be prudent to enforce your judgment against the property that’s most likely to result in payment. However, it’s always easiest to go against property that is located in the same county where both the creditor and the court are located.

Interest

A creditor has the right to claim interest, which begins to run, from the date of the entry of the judgment.

However, if accepting full payment of the face amount of the judgment without asserting a claim for interest that has accumulated since the date of the judgment, a creditor may waive (lose) his right to interest. If the judgment is payable in installments, interest begins to run on each installment only when that installment becomes due, unless the court has ordered otherwise. Interest runs on the entire judgment debt, including any court costs and prejudgment interest that the court has awarded. Where a judgment is partially paid, interest stops running on the portion of the judgment that is paid on the date it is paid, and interest continues to run at the rate of 10 percent per year on the portion of the judgment that is still unpaid. Partial payments are applied first to reimbursement of any allowable costs paid since the judgment, then to payment of the interest that has accumulated, and then to reduce the unpaid balance of the judgment.

Court Costs

A creditor can claim reimbursement of many kinds (but not all kinds) of out-of-pocket expenses that have been paid to public officials in an attempt to enforce the judgment.

Only those expenses (called court costs or costs) that are “reasonable and necessary” can be claimed. However, attorney’s fees are usually not recoverable as “costs.” Courts also do not approve transportation or telephone expenses, or claims for the time spent trying to collect. Costs must be claimed within two years after incurring them. Certain kinds of costs are always recoverable without a special court order. These may be claimed by just completing and filing with the court a form called a memorandum of costs. (In some courts, it is called a cost bill after judgment). Before filing it with the clerk, a creditor must mail a copy to (or personally serve a copy on) the judgment debtor. The date and place of mailing (or personal service) of the copy must be shown on the form that the creditor sent to the debtor and file with the clerk. When the debtor receives the form, he or she has 15 days to request the court to refuse to allow any costs that have not been reasonably and necessarily incurred (or 20 days if the debtor lives out of state). The clerk will not issue the writ of execution until the time for responding to the judgment creditor’s claim expires, plus five days for the mail to arrive.

Instructions to the Levying Officer

After obtaining a writ of execution, a creditor must then prepare and sign written instructions to the levying officer. The instructions inform the levying officer exactly what steps to take to enforce the judgment against the debtor’s property. The instructions tell the levying officer exactly what steps to take to enforce the judgment against the debtor’s property. The instructions must include a description of the property on which the levying officer is to levy execution, and the exact location of the property. The creditor must also pay the levying officer’s estimate of the costs of taking the requested action. The unused balance, if any, will later be refunded.

Sale of Property after Levying Execution

After the levying officer has levied execution on property, the property will normally be sold by the levying officer at a public sale, and the proceeds of sale will normally be paid to the creditor. However, if the particular kind of property is exempt from execution, the property cannot be taken or sold. If it is partially exempt from execution, the debtor may have “first cut” on the proceeds of the sale. For example, the first $1,200 of the debtor’s equity in all of his or her motor vehicles is exempt - meaning that the debtor will receive the first $1,200 of the proceeds of the sale after paying all liens against the vehicle or vehicles. If no one bids more than $1,200 above the debtor’s equity in a vehicle that is taken by the levying officer, the vehicle will be returned to the debtor, but the costs of the levy will be charged against the fee deposit.

BANK LEVY

Post Judgment Remedies


A Levying Officer is Authorized to Seize Funds in a Bank Account Maintained by a Debtor to Satisfy a Judgment


If a creditor knows where the debtor has a checking or savings account at a bank, savings association, thrift and loan, or credit union, he/she can use a court procedure called a bank levy to collect enough money from the account to pay the judgment, if the debtor has an account in his or her name (as it appears on the judgment).

To seize funds in a bank account maintained by the debtor, a levying officer can serve the writ of execution on the bank branch where the debtor maintains an account. If your debtor has a joint account with another person and the creditor does not have a judgment against that other person (a non-debtor), the creditor will be required to post a bond for twice the amount of the balance owed on the judgment. This bond is intended to protect the interest of the non-debtor party. If the funds in the accounts are from wages, social security, unemployment, public assistance, disability and the like, the debtor may be entitled to an exemption. To make a levy of execution on a bank or other financial institution in California, the creditor must know the name of the financial institution, and also the street address of the particular office or branch where the debtor has the account.

The instructions to the levying officer must state the correct name and address of the institution and branch where the account is located and may, but do not need to include the number of the account upon which a levy is sought. If it is known, then include it.

After the levying officer receives your writ of execution, written instructions and the fees, he/she will serve the writ of execution on the office of the bank or other financial institution named in the instructions. A copy of the levying officer’s notice is also sent to the judgment debtor. There may be an account standing in the name of the debtor at that institution and branch. If so, the levying officer will take the money and pay it to the creditor. However, the judgment may not have identified the debtor by the debtor’s correct name. In that case, the bank or other institution may lawfully report that there is “no account” in the name of the debtor, even if the debtor actually maintains an account at that particular branch.

The account may be in the name of the debtor and some other person, such as a spouse or business partner. In that case, the levying officer will take the money and ordinarily pay it to the judgment creditor. However, the levying officer will also notify the other person in order to give that person an opportunity to claim that all or part of the money actually belongs to him or her, and not the judgment debtor. A claim of this kind is called a third party claim.

The account may stand solely in the name of the judgment debtor’s spouse. In that case, the bank or other institution will state that there is no account, unless the creditor furnishes the levying officer with a declaration, which states that the debtor and spouse are married and describes the facts and circumstances that lead to the belief that they are married. The levying officer will then give a copy of this form to the bank or other institution and the creditor will get the money in the account, unless the spouse or other account owner files a third-party claim and proves that the money in the account belongs solely to the spouse. If the account is in the name of the debtor and his or her spouse, the declaration is not required.

The account may stand in the name of a business that is owned by the debtor or the debtor’s spouse, or both. In that situation, the institution will again report no account unless the creditor furnishes the levying officer a certified copy of a currently valid fictitious business name statement that shows that the debtor and/or spouse are the sole owners of the business. If a spouse is an owner, the levying officer will need a declaration, stating that the debtor and spouse are married. The fictitious business name statement, if it exists, will be found in the records of the county clerk of the county where the business has its principal office. A certified copy of the statement can be purchased. The account may be in some other name - for instance, a corporation or some other person who is not a named debtor. In that situation, the creditor cannot levy execution on the account without a special court order.

VEHICLE LEVY

Post Judgment Remedies


A Writ of Execution may Levy on the Debtors Motor Vehicle


Levying on a debtor’s vehicle is sometimes dangerous. If a marshal/sheriff or other authorized officer of the court levies on the debtor’s vehicle, the creditor must pay off all present lien holders (legal owners), and if it’s the debtor’s only vehicle, he/she has a $1,200.00 exemption.

If the vehicle is in poor condition or over financed, it could cost money to levy upon it. Run a check on the license number of the vehicle through the department of motor vehicles to determine who the registered owners are and if there are any liens on the vehicle (legal owners). If there are any legal owners, the creditor should obtain a payoff figure from them (preferably in writing). If it appears that there is equity in the vehicle(s) after deducting the payoff and applicable exemptions, the creditor should attempt to see the condition of the vehicle prior to levying upon it. It is also advisable to consult the advice of counsel before levying on a vehicle.

LEVY AGAINST A BUSINESS

Post Judgment Remedies


A Till Tap Authorizes the Levying Officer to Levy on the Contents of a Business Cash Register and Safe


Till Tap

A till tap occurs when a marshal or sheriff goes into the business owned by the debtor and takes possession of all of the money in the till. If the debtor operates a store, shop, or any other kind of business which maintains a large amount of cash on the premises, a till tap can be used to seize any funds on the premises (e.g., money in the cash register) at a given time. A till tap should occur on a day and at a time when the debtor is likely to have a large amount of cash on the premises (e.g., the last day of a big sale).


A Sheriff Keeper Authorizes the Levying Officer to Place a Keeper on the Premises of the Business for a Specific Period of Time to Collect any Cash as it Comes into the Business


Sheriff Keeper

A keeper occurs when a levying officer (often a retired sheriff’s deputy), marshal or sheriff is placed on the business’s premises of the debtor, for a number of days or hours as instructed (usually in 8 to 24 hour increments) and collects monies received by the business for the period of time instructed to be there. To do this, the creditor must pay the levying officer a deposit to cover the full cost of having a keeper on the business premises as well as other expenses that may be incurred by the levying officer. Before using a keeper, a creditor need decide whether the amount of your judgment is large enough to warrant the expense of a keeper, and whether it is likely that the business will collect enough cash to pay the judgment and the costs of a keeper. While the keeper is present, all sales must be for cash or its equivalent (for example, checks or bank credit card drafts); nothing can be sold on the business’ own credit, without the creditor’s consent. Usually, a decision to place a keeper on the debtor’s business premises is likely to result in a prompt offer of payment if the debtor has the resources to pay.

LEVY OF PERSONAL PROPERTY


A Creditor Aware of the Existence and Location of the Debtor’s Personal Property can Request a Levying Officer of the County where the Property is Located to Seize and Sell the Property to Satisfy the Judgment Debt


The debtor may own an expensive motor vehicle or other valuable personal property. If the creditor is aware of the existence and location of the property, he/she can request the levying officer of the county where it is located to take and sell the property, and to pay enough of the proceeds of sale to satisfy the judgment debt and also pay the expenses of the levy of execution.

Property Subject to Security Interest

The debtor’s property may be subject to a security interest that is held by a third person (for example, a finance company that holds the “pink slip” on the debtor’s automobile). In that situation, the secured creditor (the finance company) must be paid in full before the levying officer can transfer clear title of the property to a purchaser at a sale. Therefore, if the property is subject to a security interest (as most motor vehicles are), the creditor should not levy execution unless he/she makes arrangements to pay off the secured creditor before the sale. If the secured creditor is not paid before the sale, the property will be returned to the debtor, but the costs of the levy will be charged against the fee deposit.

Property in the Debtors Possession

For property in the personal possession of the debtor (for example, a coin collection), the creditor can request the levying officer to levy execution on property in the debtor’s personal possession. If the debtor refuses to turn it over to the levying officer voluntarily, the creditor can file a motion requesting a turnover order. The turnover order will order the debtor to deliver the property to the levying officer. If the debtor refuses, he may be subject arrest. However, the creditor can levy execution only on the judgment debtor’s interest in the property. If there is a co-owner, his/her interest in the property cannot be reached. A person who claims an interest in the property on which the creditor has levied execution can file a “third person claim” to the property.

Exempt and Partially Exempt Property

Exempt property is property that the law protects from the claims of the debtor’s creditors. Many kinds of property cannot be reached because they are exempt from execution. Some property is only partially exempt from execution. For example, only a portion of a debtor’s wages is exempt, and only a portion of any paid-up life insurance is exempt. Only a portion of a debtor’s equity in his or her motor vehicles is exempt. While the debtor can keep the exempt portion, the creditor can always levy execution on the portion that is not exempt.

Non-Exempt Property

Examples of the debtor’s property that probably are not exempt from execution and on which the creditor can levy execution include, unimproved lots, vacation homes, rental units, stamp or coin collections, stocks and bonds, precious metals, and most financial investments.

LEVY AGAINST THIRD PARTIES

Post Judgment Remedies


A Writ of Execution may Levy on a Third Party Owing Money to the Debtor


If the debtor is a landlord, the creditor can instruct the levying officer to go to a tenant of the landlord and require the tenant to pay the rent to the levying officer to satisfy the judgment.

The third party is required to forward the money it owes the debtor to the local sheriff’s department, which in turn, transfers this money to the judgment creditor. The court will order the debtor to assign a claim of this kind to the judgment creditor. For instance, the court could order a debtor who is a landlord to assign his or her right to receive rent to the creditor and the tenant would then pay the judgment creditor, instead of the landlord. A creditor can also request the court to order the debtor to assign to the creditor any wages owing to the debtor by the federal government (which cannot be collected by an ordinary wage garnishment), or any royalties or commissions that are owing to the debtor, or any insurance proceeds and other claims that are owing to the debtor.

CLAIMS OF EXEMPTION

Post Judgment Remedies


A Debtor may Claim Assets are Exempt from Levy because they're Necessary for the Support of the Debtor and Family


The law provides that a debtor may claim that his/her assets are exempt from levy because they are necessary for the support of the debtor and the debtor’s family.

A claim of exemption is filed by the debtor with the court together with a financial statement. Upon receipt of the claim of exemption, the court will mail the creditor a copy, together with copies of the financial statement and notice of claim of exemption.

The creditor who desires to contest a claim of exemption must file a notice of opposition to the claim of exemption. If the notice of opposition is filed with the marshal/sheriff the creditor is entitled to a hearing.

If the creditor desires a hearing, he/she must file a notice of hearing on claim of exemption with the court after the date the marshal/sheriff mailed the notice of claim of exemption. The hearing will be conducted unless the court continues the matter for good cause. Prior to the hearing, the creditor must give written notice of the hearing to the marshal/sheriff and must mail a copy, together with a copy of the notice of opposition to the judgment debtor.

The creditor must file a proof of service by mail with the court stating that he/she did effect service of these documents on the judgment debtor.

SUSPENDING DRIVING PRIVILEGES

Post Judgment Remedies


If a Claim is Based on the Debtor’s Operation of a Motor Vehicle on a California highway, the DMV will Suspend the Driving Privileges of the Debtor until the Judgment is Paid


However, where the debtor’s driving privileges have been suspended because of non-payment of the judgment, the court can reinstate the debtor’s driving privileges by issuing a modified judgment that authorizes payments by installments. A judgment authorizing payment by installments should include the exact amount and date on which each of the payments will be made. The court clerk will then send a certified copy of the modified judgment to the DMV, who will reinstate the debtor’s driving privileges, provided the debtor also gives proof of ability to respond to damages in the event of any future accident. The debtor will be subject to another suspension if he or she does not pay in accordance with the modified judgment. As soon as the debtor makes final payment, the creditor must file with the court an acknowledgment of satisfaction of judgment and thereafter obtain a certified copy and mail it to the DMV, who will reinstate the debtor’s driving privileges.

WAGE GARNISHMENT

Post Judgment Remedies


A Wage Garnishment also known as “Earnings Withholding Order” Authorizes the Levying Officer to Seize a Portion of the Debtor’s Salary or Wages Directly from the Employer


The debtor may be working for someone and receive a regular salary or wage. In that event, the creditor can request the levying officer to take a portion of the debtor’s salary or wages directly from the employer. (This is called wage garnishment).

A wage garnishment is embarrassing to most employees and burdensome to most employers. Therefore, it may prompt the debtor to either pay off the judgment or agree to a payment plan. If the debtor pays in full, or if the debtor reaches an agreement on a payment plan, it’s essential to immediately send the levying officer written instruction to stop taking the debtor’s earnings.

Unless the debtor’s income is very low, a creditor may garnish up to 25% of the debtor’s net (i.e., after tax) income. 75% of wages are exempt from execution which entitles the creditor to 25% of the debtor’s net disposable earnings. A debtor may claim all of his/her wages as exempt.

After the clerk has issued the “writ of execution,” to levy upon wages, an “application for earnings withholding order” must be served upon the employer by the county marshal/sheriff or authorized officer of the court. Upon service on the employer, there is an automatic 10-day stay of execution, and the employer must then withhold from the judgment debtor’s wages for the 180 days or until the judgment is satisfied, whichever occurs first.

In the event the entire amount of the judgment is not collected, a memorandum of costs, credits and accrued interest may be filed and a new writ of execution issued, which may be served again upon the employer together with the application for earnings withholding. The debtor may petition the court to pay the judgment in installments, in which case the creditor has an opportunity to oppose or accept the payment schedule prior to the court’s ruling. In the event the debtor fails to meet the prescribed payment schedule, the creditor may petition the court to set aside the payment order and allow the execution of the judgment debtor’s assets in order to satisfy the judgment.

Application for Earnings Withholding Order

To enforce the judgment (that is, to levy execution) upon the debtor’s earnings, a writ of execution and an application for earnings withholding order is required.

The application for earnings withholding order and writ of execution must be delivered to the appropriate levying officer in the county in which the debtor’s employer is located, who will serve it on the debtor’s employer. The debtor’s employer is then required bylaw to withhold a percentage of the employee’s earnings from each paycheck. The amount withheld is set by law at approximately 25 percent of the judgment debtor’s take-home pay. Beginning 10 days after service of the earnings withholding order, the employer begins to withhold money from each paycheck, and continues to do so until the total stated on the writ of execution (plus the levying officer’s fee) is paid, or until the 100-day duration of the earnings withholding order has expired.

It is a criminal offense for the employer to fail to make the required payments to the levying officer. Once served, the employer has 15 days to complete and mail to the levying officer a report on the status and income of the judgment debtor. The employer must send the amounts withheld to the levying officer, and the levying officer will forward the money to the creditor, who can expect to be paid monthly. If the wage garnishment is successful, the creditor will eventually receive the full unpaid balance of the judgment, plus the fee charged by the levying officer. If the judgment has not been fully paid before the expiration of the 100-day duration of the earnings withholding order, the creditor can restart the process as soon as the sheriff has returned the writ of execution to the clerk of the court. Practical considerations.

Debtor’s Claim of Exemption

The debtor may file a claim of exemption. If all or part of the debtor’s earnings, are necessary for the support of the debtor or his or her family - such as food, clothing, housing, transportation, insurance, education, and medical services - the portion of the debtor’s earnings that is necessary for the support of the debtor or the debtor’s family is exempt.

If the debtor has filed a claim of exemption, the levying officer will send a notice of filing of claim of exemption, with a copy of the debtor’s claim of exemption and a copy of the financial statement that the debtor is required to file with the claim of exemption.

The creditor can oppose a claim of exemption if some of the expenses claimed on the financial statement are not necessary for the support of the debtor or the debtor’s family, or if there is more family income than the debtor has reported (such as the earnings of a spouse).

To contest the claim of exemption, the creditor need complete, sign and file two documents - a notice of opposition to claim of exemption, and a notice of hearing on claim of exemption. The original signed notice of opposition to claim of exemption must be filed with the levying officer; and the original notice of hearing on claim of exemption must be filed with the court. A copy of the notice of hearing must be filed with the levying before the court hearing. A copy of both documents must be mailed to the debtor, and also to any attorney for the debtor whose name is mentioned in the claim of exemption, at the address or addresses stated in the claim of exemption, and a proof of service must be filed with the court.

Court Hearing to Determine Claim

If the creditor opposes the debtor’s claim of exemption, the clerk of the court will schedule a hearing. At the hearing, the creditor and debtor may explain to a judge why the debtor’s claim of exemption is or is not legally valid.

Effect of Order Determining Claim of Exemption

At the conclusion of the hearing, the judge will either approve or disapprove the debtor’s claim of exemption, or the judge may adjust the amount of the earnings to be withheld.

If the debtor’s claim of exemption is approved, the creditor cannot normally request another wage garnishment until the later of 100 days after the earnings withholding order was served on the employer, or 60 days after the court ordered the termination of the withholding of the debtor’s earnings. Similarly, if the court denies the claim of exemption, the debtor cannot normally file another claim of exemption for the duration of the earnings withholding order. Only a change in circumstances would alter either of these rules.

Release of Earnings Withholding Order

After the levying officer has served the earnings withholding order on the employer, the debtor may contact the creditor and offer to pay the judgment in full or by installments, against the release the earnings withholding order, in which case the creditor must terminate the earnings withholding immediately after full payment of the judgment.

JUDGMENT DEBTOR EXAMINATION

Post Judgment Remedies


A Court Order must be Served on the Judgment Debtor to Compel his Appearance at a Judgment Debtor Examination, when he is Required to Submit to Questioning Under Oath about his Assets and Financial Situation


To obtain more information about the debtor’s assets, the debtor can be required to submit to questioning under oath about his financial situation.

To compel a debtor to appear for examination, a court order is obtained from the court, which is then served upon the debtor. When a copy of the signed order is served, the debtor will be required to personally come to court, at the time and place given in the order, for the purpose of answering questions about his or her property and sources of income.

The order of examination must be served on the debtor before the examination date. This is done by handing a true copy of the order to the debtor. The person serving the copy must be prepared to show the debtor the original signed order, if the debtor requests. As soon as the order is served, the original form (signed by the judge or other court officer), with a signed proof of service attached to it, must be filed with the clerk of the court. Some courts require that the form be filed at least five business days before the date set for the examination.

If the debtor fails to appear for examination, a bench warrant may be issued for his arrest and the debtor may be arrested if he or she does not appear. However, if the debtor does not live or have a place of business in the county where the court hearing was held, or within 150 miles of the court, the examination will have to be conducted in the county where the debtor lives or has a place of business.

Production of Documents

The creditor may order the debtor to produce certain documents at the examination, by the issuance of a civil subpoena duces tecum (order to bring documents to court) at the same time the clerk issues the order to appear for examination.

The subpoena must be prepared, signed and submitted, with a declaration, in which the creditor describes the exact documents he requires the debtor to produce at the examination (for example, the debtor’s drivers license), and why the documents are required. Once issued the levying officer (marshal, sheriff, or constable) or registered process server must personally serve the subpoena and declaration on the debtor, who is then required to produce the documents at the examination.

Conducting the Examination

At the examination, the debtor will be questioned about his/her property and sources of income. If the debtor refuses to answer a question, the creditor may seek an order from the judge, compelling the debtor to answer the question. Where the court has ordered the debtor to bring documents to court, these documents may be reviewed before the creditor poses any questions to the debtor. The creditor may check to see that each of the requested documents has been provided. The purpose of the examination is to provide an opportunity to obtain information from the debtor: the nature, description, and location of the debtor’s assets, and the sources of his/her past, present, and future income.

Requesting a Turnover Order

The debtor may have in his/her possession cash in a wallet or purse, or funds in a checking account. If so, the creditor can request the court, then and there, to order the debtor to turn it over. An order of this kind may be more effective than any other enforcement procedure. If the debtor refuses to obey the order, the court can hold him/her in contempt of court.

Recovering Costs

The creditor may have incurred some out-of-pocket expenses to serve the debtor with a copy of the order for examination or subpoena. If so, these costs can be added to the judgment by completing, filing, and serving the debtor with a memorandum of costs form (in some courts it is called a cost bill after judgment).

If the Debtor Fails to Appear

The debtor may have been properly served, but may not have appeared. If this happens, the court can issue a warrant for the debtor’s arrest for contempt of court for failing to comply with the court’s order to appear. Some courts prefer instead to order the debtor to appear in court to explain the disobedience of the first order, and some courts send a letter to the debtor warning of the penalties and scheduling another hearing date for the examination.