How Do I Collect My Judgment?
So you have been successful in a lawsuit and obtained a money judgment to compensate you for harm you have suffered. The other side refuses to pay, claims they are unable to pay, or is threatening to appeal or file for bankruptcy. How can you collect on your judgment? Prevailing in a lawsuit is often only half the battle, particularly when enforcement of a judgment involves a going business, interrelated corporate entities, a business’ trademarks or copyrights, or insolvent businesses and bankruptcy considerations. The business litigation attorneys of Brown & Charbonneau, LLP can help. We have experience aggressively collecting and enforcing all forms of judgments and have litigated the nuances and potential pitfalls for the inexperienced.
Methods of Judgment Collection
With certain exceptions, all property of a judgment debtor is subject to enforcement of a money judgment. This may include residential or commercial property, motor vehicles, business inventory, equipment, stock, insurance proceeds, pension plans, trademarks and copyrights and even internet domain names. California law provides a variety of procedures that can be utilized to reach a judgment debtor’s property to satisfy a judgment, including:
- Wage Garnishment – If the judgment debtor is employed, a court order may be sought requiring an employer to withhold the debtor’s earnings in satisfaction of the judgment. Generally, a judgment creditor has the right to collect up to 25 percent of the amount over the federal minimum wage that the debtor earns.
- Writs of Execution, Possession or Sale – A writ of execution, possession or sale is a judicial process allowing for a levying officer (usually a sheriff or marshal) to seize, deliver possession and/or sell personal property of the judgment debtor in satisfaction of the judgment. For example, a writ of execution may be sought from the court directing the county sheriff to seize all funds held in the debtor’s bank account, or to sell inventory or equipment of the debtor at auction to pay a judgment.
- Real Property Liens – An “abstract of judgment” is a document that is recorded with the County Recorder’s office which creates a lien on the judgment debtor’s real property (home or land). The lien ensures the judgment creditor is paid if the debtor tries to transfer, sell or refinance the property. In certain situations, “foreclosure” on a judgment lien may be sought to force the debtor to sell the property to pay a judgment.
- Keepers – A “keeper” is a person placed at the judgment debtor’s business premises by a levying officer to take physical custody of sales proceeds from the business in satisfaction of a judgment. The keeper may seize cash and checks, and may open mail received by the business. While expensive, utilization of a keeper can be an effective method of judgment collection particularly where the debtor maintains a business with significant cash proceeds on the premises.
- Debtor Examinations – A court order may be sought compelling a judgment debtor or a third party to appear and answer questions concerning the nature and whereabouts of a debtor’s assets and property interests.
- Fraudulent Conveyance Actions – California law provides protections against a judgment debtor’s attempts to transfer assets to avoid paying a judgment. A lawsuit may be commenced against the debtor and third-party recipients to recover the debtor’s property and void fraudulent transfers or sales.
Can I Recover the Costs of Collection?
The amount required to satisfy a money judgment is the total amount of the judgment entered, in addition to costs incurred to enforce the judgment and accrued interest. Costs may include the statutory fees for obtaining and serving judicial writs and orders, and the costs of recording documents with the County Recorder. The rate of interest on a money judgment is 10 percent per year, commencing on the day the judgment is entered.
Attorney fees incurred in enforcing a judgment may also be recovered where the judgment provides for an award of contractual attorney fees, or when otherwise provided by law.
Getting Legal Help
Brown & Charbonneau, LLP represents individuals as well as large and small companies in cases involving all forms of judgment collection. If you involved in a judgment enforcement matter, or would like to learn about your rights and how to protect your business, we can provide you with the information you need. Call today to schedule a consultation and learn more about how we can help you.