When your hard work leads to a judgment on behalf of your client (or even yourself), it is a cause worth celebrating. However, the hard work is not necessarily over. While a judgment entitles a party to receiving payment, actually, enforcing that judgment turn into another matter.
In California, the responsibility for enforcing a judgment is left to the creditor if payment is not voluntarily made by the debtor or obligor.
Lilly’s Process Service can help you carry out various enforcement methods by preparing and serving:
- Wage Assignments
- Wage Garnishments
- Bank Levies and 3rd Party Levies
- Till Taps
- Sheriff’s Keepers
- Seize and Sell Levies
- Motions for Turnover Orders
- Real Property Liens
- Secretary of State Liens
- Cause-of-Action Liens
- Assignment Orders
- Debtor’s Exams
- Small Claims Lawsuits
Here are a few pertinent pieces of information on each of the services we offer.
A wage garnishment recovers funds by garnishing (or levying) them from a debtor’s paycheck.
A wage assignment, on the other hand, is an assignment of the right to a portion of the obligor’s wages or salary. A wage assignment differs from a wage garnishment or levy in that there could be tax implications to receiving part of a debtor’s wages through an order that is based on an assignment of rights. This is most easily illustrated by comparing a civil money-judgment with an order for spousal support: if you garnish a debtor’s wages to recover a money-judgment, there are generally no tax implications; however, spousal support, which, also, is enforceable against an obligor’s wages (but notably by an earnings “assignment” order) is taxable to the payee and tax-deductible to the payor. An “assignment” of rents could have similar tax implications, at least, to the recipient. Depending on the nature of the order or judgment being enforced, a mandatory wage assignment or other assignment can be sought through a court order so that portions of the debtor’s income are reassigned to the creditor or oblige, until the debt is paid.
A bank levy freezes the funds in one or more financial accounts of the debtor and takes that money to cover a judgment. A common misconception is that the creditor must know the debtor’s account number in order to effectuate a bank levy; this is not true. Much the same way that a real property lien attaches to all property, refinances, or purchases of new properties in a debtor’s name, in the county where it is recorded, a bank levy attaches to all accounts in the debtor’s name, either alone or together with third parties. In order to effectuate a bank levy, the debtor must be sufficiently identified, which is best accomplished by indicating a social security number on the levy – if a bank receives a levy without sufficient/indisputable identifying information, the bank will simply respond that they are unable to locate (or narrow down) the particular debtor and the levy will be ineffective.
Third party levies are effectuated in much the same way as bank levies, but they differ in the fact that they are served on a “third party” (possibly an individual, insurance company, etc.) in possession of money that is owed or due to the debtor or assets that can be delivered and/or sold in order to satisfy all or part of a judgment.
Till taps are a way to satisfy judgments against an ongoing business. If the business has a cash register, a till tap allows a sheriff to take money out of the business’ cash register to pay the debt; this will require a sheriff’s fee each time the sheriff “taps the till.”
Keepers are another way to collect from a business-debtor. For a fee, a “keeper” (the sheriff) may be installed in the business establishment to take all funds that come in for a set-specified period of time, until the judgment is paid. This is commonly referred to as an 8-hour, 12-hour, or 24-hour keeper. A 48-hour keeper differs in that a 48-hour keeper (the sheriff) will go to the business, deliver the execution and keeper papers, and inform the business-debtor that, unless the judgment is paid within 48 hours, the sheriff will return to the business, bar the doors, seize all property and funds on the premise, and proceed to sell the property at auction. Both are both allowed, but the 48-hour keeper requires a much higher fee (commensurate with the type of business and space that will be required to store and sell the property).
Property liens can also be a viable method of obtaining payment from a debtor. Real property and personal property liens are used to satisfy a debt through a debtor’s real estate or the personal property. A real estate lien is pretty straightforward: it creates a lien against the debtor in all real estate owned, being purchased, being sold, being refinanced, or being reconveyed in the County where the lien is recorded. Personal property liens can be used to seize valuables such as jewelry, antiques, or other valuables. Executing on a personal property lien is often very impractical, but recording the lien could improve a creditor’s “secured” status in the event a debtor files bankruptcy.
Additionally, assignment orders can be used when it is difficult to find assets of a debtor that can be used to satisfy the judgment. In such instances, an assignment order can be used to collect on a debt that is otherwise uncollectible. For example, a self-employed individual cannot have their wages garnished, but, with an assignment order, the payments, rents, insurance settlements, or other forms of remuneration due, or to become due, to the debtor can be collected (“assigned”).
Debtor’s exams are another clever way to collect on a judgment. If you are unsure of the best way to collect, why not ask the debtor? A debtor’s examination places the debtor under oath, when they can, then, be asked questions about their property, income, and assets. This helps determine the best way to proceed when trying to collect the judgment. Ironically, inquiring into a debtor’s monthly obligations and bills will, usually, reveal a lot of information, because debtor’s will often boast about their expenses and financial shortcomings but not their income – in these cases, it is the source of the payments for the bills that might prove to be more revealing.
Finally, if the amount in dispute is relatively small, it may be wise to take the matter to small claims court through a small claims lawsuit.
No matter which strategy is best for you, we look forward to helping attorneys prepare and serve these documents in California.