As much as they want. Some clients really want to get into the weeds on the details, while others don’t really care and just say, “Go do what you have to do.” Most clients lean toward the latter. They know their business, and they don’t really want to become a lawyer, so they trust us to do what we have to do.

Do Judgment Liens On Property Apply In Commercial Cases?

If we have a judgment, I usually record a notice of judgment lien with the Secretary of State so that if the business goes to refinance or files a bankruptcy, it’ll pop up that we’re a secured creditor. Now, are we the first secured creditor? Who knows what position we’re in, but it costs $5 or $10 to file a notice of judgment, so it’s a no-brainer. We do it automatically when we get a judgment.

 Is There A Way To Become Preferred In The List Of Creditors?

Whoever files first is generally the preferred creditor. As we say, first in time, first in right.

Enforcement Of Judgment By Writ Of Execution

Once we have a judgment, we need a document called a writ of execution to be issued by the clerk of the court where the judgment was entered. We then give that document to the sheriff to be used for a bank levy, a wage garnishment, or a real property levy. The writ is essentially the template document needed to start collection efforts post-judgment.

The Drawback Of Collection Efforts

When we get a judgment against a business or an individual and either levy their bank account or do a wage garnishment, there’s nothing that can stop them from then filing a bankruptcy—that’s just one of the risks. In most cases, they have other debts too, so while they’re not just filing because of us, our judgment might push them over the edge. But if we don’t try to collect, then we won’t collect anything. I just want clients to be aware that sometimes you can push folks too far and they will file bankruptcy. If they were going to file at some point anywhere, I feel it’s better to know sooner rather than later.

How Do Judgments Outside Of California Work?

Judgments in any of the 50 states are enforceable in other states. If I have a judgment that I received in Wyoming and my debtor lives in California or the debtor’s assets are in California, I can do something called domesticating the judgment. I work with one of my out-of-state attorneys (who frequently help me handle out-of-state judgments) to convert the judgment to a California judgment, which we can then enforce here. The out-of-state attorney can’t come here to California and start enforcing the judgment, just as I couldn’t go to Wyoming and enforce a California judgment there because I’m not admitted in Wyoming. We have to go through the proper steps to turn our California judgment into a Wyoming judgment.

Domesticating the judgment doesn’t necessarily apply for federal court judgments as the U.S. District Courts are basically one United States court. Even though there are courts in different states, it involves a much easier process. All you have to do is register a judgment entered in a federal district court in another state here in California by filling out a one- or two-page form. You’d still need a local attorney, but it’s much easier than taking an out-of-state judgment and converting it to California.

What Is An Order In Aid Of Execution?

An order in aid of execution is basically a turnover order. To illustrate, let’s say you have a judgment and you bring a client for a judgment debtor exam, which is a deposition that takes place in court, during which you get to ask the debtor about what assets they have and where are they located. If the debtor shows up to court wearing a Rolex watch, I can ask the judge to order them to turn over the Rolex to me. This obviously doesn’t happen very often, but the same would apply if they showed up with $2,000 in cash in their pocket or a fancy ring on their finger (though wedding rings would be exempt). When I’m representing someone who owes money, I tell them to wear simple clothes—no watches, no fancy jewelry—if they’re subpoenaed to go into court.

What Is A Seizure Order?

A seizure order rarely happens. Sheriffs typically don’t go into somebody’s home and seize a vehicle or a boat sitting in the garage. They don’t like to risk their lives so that you can collect some money.

For more information on Pre-Lawsuit Considerations if Prior Collection Efforts Are Unsuccessful, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (714) 594-6322 today.

Art Matthews

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