HOW TO REGISTER AN OUT-OF-DISTRICT FEDERAL JUDGMENT IN CALIFORNIA

If you have won a federal judgment in another state, you may be able to register that judgment in California so that you can enforce it here. You can register state court judgments in California as well but the process is different. Read our step by step guide to domesticating a foreign state court judgment here.

The statute that supports registration of judgments is 28 U.S. Code § 1963 – Registration of judgments for enforcement in other districts. To register a judgment it must be past the time for appeal to be filed.

Each district in California has its own procedure to actually register the judgment. One strange procedure is found in the Central District of California. To register an out-of-district federal judgment there, you must send a form to the issuing district court , Form AO-451 which a clerk’s certification of judgment. Once you have completed Form AO-451, you will need to submit it to the Clerk along with a certified copy of the judgment.

Once registered you can immediately enforce the judgment as any other district court judgment. You can utilize the same post judgment execution devices as a state court judgment. Contact us today to get your federal judgment registered in California.

How to Conduct a Judgment Debtors Exam in California

If you have a judgment against someone, you may be able to conduct a judgment debtors exam. This is a court proceeding where you can ask the judgment debtor questions about their assets and income. You can use the information you learn to collect on your judgment.

Why Conduct a Judgment Debtors Exam?

There are a few reasons why you might want to conduct a judgment debtors exam. For example, you might want to do this if:

• You are having trouble collecting on a judgment.
• You want to learn more about the judgment debtor’s assets and income.
• You want to get a lien on the judgment debtor’s property.

How to Prepare for a Judgment Debtors Exam

To conduct a judgment debtors exam, you will need to file a Request for Examination with the court. You will also need to serve the judgment debtor with a copy of the request. The judgment debtor must be served personally with a copy of the order for examination at least 10 days prior to the examination. The judgment debtor must be served within 120 miles of where the judgment debtors exam is to take place. If your judgment debtor does not live within 120 miles of the court where your judgment was entered but they are still in California, you can still examine them. You would need to file an abstract of judgment in the court that is within 120 miles along with the order for examination. You can then examine the debtor in that court just as you would where your judgment was entered. When you serve your judgment debtor with the order for examination, you can and should serve them with a subpoena that asks for their critical financial records including bank statements, pay stubs, titles to vehicles, and accounting information on their businesses. This information will help you get a clearer picture of their finances.

What Can You Ask at a Judgment Debtors Exam?

In a judgment debtors exam, you can ask the judgment debtor any questions you want about their assets and income. A lot of the basic questions you would ask, such as where they work or where they bank, should be answered by the document production you requested in your subpoena. If the judgment debtor fails to produce the documents you have subpoenaed, you can request the judge to order the debtor back for a further examination. Additionally, you can ask about the judgment debtor’s spouse.

Can You Seek Additional Orders from the Court at the Exam?

At the judgment debtors exam, you can also ask the court for a turnover order. A turnover order is an order that requires the judgment debtor to turn over any assets that are subject to your judgment. For example, if the judgment debtor has a bank account, you can ask the court for a turnover order that requires the bank to turn over the money in the account to you.

In addition, the service of an order for an examination puts a lien on all of the judgment debtor’s personal property for one year.

What Happens If the Judgment Debtor Doesn’t Show Up?

If the judgment debtor does not show up for the exam, the court may issue a bench warrant for their arrest.

Conclusion

A judgment debtors exam is a valuable tool that can help you collect on your judgment. If you have a judgment against someone, you should consider it.

An experienced post-judgment attorney can help make the judgment debtors exam a successful experience. If you need help with a judgment debtors exam, contact us here.

HOW TO LEVY A BANK ACCOUNT IN CALIFORNIA

I am a huge fan of the TV show How I Met Your Mother. Whenever I hear about something associated with malls, I immediately think of Robin Sparkles’ hit song, “Let’s Go to the Mall.” But now I like malls for another reason: I can have a major bank served with a bank levy there. How is that possible? I’ll get there, but first, let’s discuss the process of levying a bank account.

HOW TO LEVY A BANK ACCOUNT

Once you have obtained a judgment, the basic process for levying a bank account is as follows:

1. Figure out where your debtor banks. There are several ways to go about this, but I am not going to get into that in this post. Once you have determined where they bank, you must check the State of California’s website, which identifies the proper branch to serve bank levies here Bank Levy Central Branch Locator.
2. Obtain a writ of execution for the county that has the correct bank branch. As I discussed in my nuts and bolts of wage garnishment post, the judgment is not the instrument that you need to do bank levies. A writ of execution is the document needed. A writ of execution can be issued for each county in the State of California. Writs are valid for 6 months and can be renewed as long as your judgment is valid. In California, judgments are valid for 10 years and are infinitely renewable.
3. Send the writ with levy instructions to the sheriff of the county. This is another situation where different counties have different instructions for levies and require different things to be submitted. The best source to figure out what is necessary to be submitted is the website of the county sheriffs. Some counties do not have any instructions at all. In that case, you must write your own. We make sure that we keep templates saved for each county in our forms library for quick access. As I mentioned in the wage garnishment post, some county sheriffs will not serve bank levies. In that situation, or the situation where the county sheriff is overwhelmed, which is sometimes the case in Los Angeles and Sacramento, you hire a private process server to serve the levy. You would still have to have the process server open the levy with the sheriff, which is the official levying officer (where the return to the levy must be sent and funds from the levy must be sent).
4. Once the levy is served on the proper bank branch, the bank has a certain time in which it must submit a response to the levy to the sheriff. Occasionally, a bank will not respond to the levy, and we will have to send them a friendly reminder that they need to respond or face a creditor’s lawsuit.
5. Once they respond with information on the levy, the judgment debtor is notified of the levy, and they have a certain period of time to claim the funds exempt. Once that time passes, if no claim of exemption is filed, then the bank turns the money over to the sheriff, and then the sheriff cuts us a check.

If you need help levying a bank account contact us HERE

You’ve obtained a judgment in a civil case. If you think your judgment debtor owns real property or could potentially own real property, you need to obtain and record an abstract of judgment in the county you believe they own real property in as soon as possible.

What is an abstract of judgment?

An abstract of judgment is a document that you record to create a lien on any interest in real property your judgment debtor owns. Once properly recorded, your judgment debtor will not be able to sell or refinance the property unless they pay off the lien or get your approval to subordinate or release the lien. If you record the abstract in the county where they acquire real property after the abstract is recorded, the property will automatically be covered by the abstract. Typically, when a judgment debtor refinances or tries to sell a property, I will receive an escrow demand for a full payoff and when the sale or refinance closes, we release the lien. For more on how to remove the lien after paying off a judgment, read this blog post on removing judgment liens.

The process of recording an abstract of judgment

Once you have a judgment entered, you need to fill out the abstract of judgment form. If you know them, you’ll need to include the last four digits of any of your judgment debtors and their driver’s license number. You will submit the abstract to the court clerk’s office. If everything is in order, they will issue you a stamped abstract. You will need to take it or send it to every county you believe your judgment debtor has or might acquire real property in. You can obtain multiple abstracts of judgment at once if you need to record in several counties.

Why is it important to record an abstract as soon as possible?

It will not likely result in you getting paid immediately, but it is important to record an abstract as soon as possible because the priority of the liens in most instances is determined by the timing of recording. Meaning that most of the time, the lien recorded first in time gets paid before other liens. It will establish priority in liens if there is a short sale or foreclosure on the property or if you ever want to force an execution sale to get paid.

An abstract of judgment is an important and effective tool to collect your judgment. Interest accrues on California civil judgments at the rate of 10% per year.

If you need help recording a lien in California, contact our office HERE

Third-Party Rent Levy

Here’s the situation: Your judgment debtors own a piece of real property, you have already recorded an abstract of judgment in the county it is located, you have determined there isn’t enough equity to do an execution sale on the property. (If you don’t know about that issue check out Can you force a sale of real property?) You have determined the judgment debtors are renting the property to a third party. How can you tap into that rental income the property? The answer is to levy the rent using a third-party levy.

A third-party rent levy is a legal process that allows a creditor to collect a debt by seizing rent payments that are owed to a debtor. If you have a valid judgment against the property owners, take the following steps:

1. Obtain a writ of execution in the county where the property is located.
2. The creditor must serve the debtor with a Notice of Levy. Some counties, like San Diego, have a sheriff’s department levy form with information they require to serve the levy. Every county is different, so check with the sheriff’s civil office in the county you are doing your levy if you have questions.
3. The creditor must then serve the Notice of Levy on the third party, which is the person who is holding the debtor’s rent payments.
4. The third party must then withhold the debtor’s rent payments and send them to the creditor.

For help collecting your California judgment contact us HERE

The nuts and bolts of preparing a real property levy.

 

This blog post is the nuts and bolts of preparing a real property levy.  It assumes you’re you’ve determined that a real property levy is viable.  I’ve written a separate blog on that issue here. Once you have determined that a property you have a judgment against is appropriate for a real property levy now you must take all the steps necessary to have an execution sale.   This process is highly technical and requires a lot of time and patience.

 

First, obtain a writ of execution for the county which the sale will take place.  Make sure you have included all of the allowable costs and calculated the interest prior to filing a memorandum of costs with the court to seek the writ of execution. 

Next, prepare the application for real property levy with the county sheriff in the county where the sale will take place.  Each County’s application is slightly different, but it will likely need to include a legal description of the property you intend to execute on (you can typically find the legal description on the deed to the property).  You submit it to the sheriff with the writ of execution and the levy fee.  Some counties require only a deposit, some to record the levy, and some counties ask for the whole fee to sell the property upfront, which can be thousands of dollars.

The sheriff will process the levy, and if everything is in order they will record it and send it back to you. Once the levy is recorded you must make an ex parte application to sell the property.  You must serve it on the sheriff within 20 of days of the levy. https://codes.findlaw.com/ca/code-of-civil-procedure/ccp-sect-704-750/.  If the property you seek to sell in the county where the judgment was entered you just use your normal case number.  If the property is not, you must file an abstract of judgment in the county where your property located to get a case number to get your ex parte heard and order to sell the property issued. 

While you can’t file the ex parte application for the sale of the dwelling until after the levy is recorded, I suggest that you prepare it (and the abstract if your matter is not in the same county as the property you are selling) prior to submitting the levy paperwork to the sheriff..   That way as soon as you get the levy back you can concentrate your efforts on obtaining the ex parte hearing date and getting the application served in plenty of time to meet the deadline.  

The ex parte application should identify all of the lienholders, their addresses, and the amount due on each lien (you should have obtained this information when you obtained your litigation guarantee or by sending a letter to senior lienholders, as I mentioned in the first blog on executing on real property). The application should also state whether there is a homestead or a veteran’s exemption, and the fair market value of the property.

If everything is in order with the ex parte application and service the court will set a hearing date for the motion for the order to sell the property.   The hearing must take place within 30 days of the ex parte application.  Once the court issues the order and gives you the time and date you must prepare a new notice of hearing. The notice of hearing and application for sale must be served on the occupants of the dwelling and posted on the property.  

One of the first steps you take after obtaining a judgment is to record an abstract of judgment in each county your judgment debtor owns property. Recording an abstract establishes a lien on the property and prevents your judgment debtor from selling or refinancing their property without your consent.

In many instances once you’ve taken this step you can sit back and let the judgment accrue interest at 10% per year and wait until the judgment debtor attempts to sell or refinance property. Sometimes a more aggressive approach is warranted to force the sale of the asset. The best tool to do this is to levy the property with a writ of execution to initiate a sheriff’s sale. A sheriff’s sale is an expensive and time consuming process but if done correctly under the proper circumstances, it is a powerful tool. This post details the steps you should take to determine whether a real estate levy is a viable option for your case.

The property pictured in the header of this post is a 4 bedroom 3.5 bath home of over 6,000 square foot on .97 acres in Pleasanton (East Bay) California. It was sold by Alameda (Oakland) Sheriff’s Department on an execution sale directed by my office. It sold for over 2.5 million dollars.

A real property levy can only be used when the judgment debtor has equity in the property over the liens senior to your position on the property. Put simply: if the property is sold, all lienholders ahead of you have to be paid in full before any money can go towards the satisfaction of your judgment. You will not be able to obtain an order from the court to allow the sheriff to conduct the sale if the sale would not produce any funds to satisfy your judgment.   The first step is to determine if you would get any money from the sale of the property is to determine what liens have a higher priority than you.   To do this you should conduct a public records search to see what, if any liens are on the property recorded prior in time to the abstract of judgment you have recorded in the county where the property is located.  

When you have determined which liens are ahead of you the next step is to determine the balance of each lien.   If you have recorded an abstract on the property, Civil Code 2943(a)(5) allows you to send a letter to any senior lienholder to obtain a payoff statement of their lien within 21 days of the letter.  After you have determined the balance of the senior liens you need to determine whether a disabled veteran exemption or homestead exemption applies.  A homestead exemption is either recorded or can be claimed, if the exemption is claimed the burden of proof is on party claiming it but you must make your own decision prior to taking the next steps on whether you believe the exemption applies.  Additionally, the amount of homestead exemption differs in family circumstances and when you first obtained your lien on the property.  If the lien is first recorded prior to 2021 the amount is significantly smaller.   Next, you need a rough estimate of the Fair Market Value of the home.  Using all the information you have obtained you should have an idea of whether there is equity or not in the property and whether you want to proceed with the next very expensive steps.  If there is a homestead exemption present on the property, the sale price of the home can be no lower than 90% of the fair market value.

If you have determined there is equity in the property you are now ready to proceed with steps necessary to levy the property and obtain an order for sale from the court.   Part II of this post will detail the levy process and obtaining the order for sale.

HOW TO DOMESTICATE AND COLLECT ON YOUR OUT OF STATE JUDGMENT IN CALIFORNIA

By Bryan Grundon

California is one of only two states that has not enacted the Revised Uniform Enforcement of Foreign Judgments Act, the purpose of which is to simplify the process of collecting on your judgment in a state different from the one in which it was entered. In California you apply for entry of a sister state judgment. Since the process is unique to California having a firm that understands the process is critical to quickly getting your judgment ready for execution. This post describes the process of bringing another state court judgment to California. You can bring a federal district court judgment to California as well but the process is different.

WHAT YOU NEED TO START THE PROCESS

To turn your out of state judgment to a California sister state judgment you will need to file several documents:

1. Application for entry of sister state judgment. You will need to fill out all the information requested. California allows you to add post judgment interest at the legal rate of the state of origin. You much provide the rate and statute from the state your judgment was entered in. You must attach a certified copy of the original judgment to this document.
2. Notice of entry of sister state judgment. This document is the basically the summons equivalent for this type of case. You will transfer information you’ve already filled out on the application for sister state judgment.
3. Civil Case Coversheet. You are filing a new California case. You will check the enforcement of judgment box for the case type.
4. Sister State Judgment. This is not mandatory in all counties. The San Diego version is linked here. You will need to check county to county to see if it is necessary for your matter.

WHAT HAPPENS AFTER YOU FILE THE DOCUMENTS WITH THE CALIFORNIA COURT?

If everything is in order the court will file the case, enter the judgment and give you a local case number. You must serve all the required documents above on your judgment debtor. There are a limited number of grounds a judgment debtor can challenge the entry of a sister state judgment In most cases, before you can collect on it, you will need to serve the new judgment on the debtor and allow them thirty days to respond before you can take any involuntary action to execute on the judgment. If the judgment debtor is not a resident of California or emergency circumstances approved by a Superior Court judge execution proceedings are allowed immediately.

Once execution is allowed a sister state judgment operates like a California judgment in all respects. From the time of filing they accrue post judgment interest at the California rate of 10% per year.

The Grundon Law Firm utilizes many post judgment tools to collect your judgment. Contact us today for help domesticating and executing on your judgment.

One of the most common tools to enforce a judgment is to levy a bank account.  A levy is a process where you serve your debtor’s financial institution (they can be used for credit unions too) and it captures all the money in the account at time the levy is served (less automatically exempt funds like social security or disability payments).  

To use this judgment enforcement tool, the first thing you would need to do is to determine where your judgment debtor banks.   There are many avenues to accomplish this. One example is, if you have a credit application from your debtor it will likely include this information.   Another example, if you paid your judgment debtor in the past, or they paid you, you can check cancelled checks or ACH’s to determine this.   As a last resort, if you don’t have any information you can serve the judgment debtor with an order to appear for an examination (See past blog: The Detective Aspect of Collecting), or to hire a skip tracer to do a bank account search.   

Once you’ve determined where they bank, you must find the proper place to serve the levy. When I first started practicing law, if you wanted to do a bank levy you had to serve it at the branch at which the account was opened in order for it to be effective.   So, even if you knew that your debtor had money at a big bank like US Bank or Bank of America, you would still have a difficult time hitting on a levy. California law now requires financial institutions to designate a central location for bank levies to be served. This accomplished by checking: www.dbo.ca.gov/Laws_&_Regs/legislation/service_of_legal_process/. If the financial institution doesn’t designate a central location, you can serve levies at any branch in the state. In the case that the institution doesn’t have a central location, I recommend that you avoid serving bank levies in the Bay Area, Sacramento, or Los Angeles.

Next, you need to obtain a writ of execution for the county you want to serve the levy in. As I discussed in my Nuts and Bolts of Wage Garnishment post, the judgment is not the instrument that you need to do bank levies, but instead a writ of execution is the document needed. A writ of execution can be issued for each county in the State of California. Writs are valid for 6 months and can be renewed as long as your judgment is valid. In California, judgments are valid for 10 years and are infinitely renewable.

Finally, you must send the writ with levy instructions to the sheriff of the county. This is another situation where individual counties may have different levy instructions and require particular things to be submitted. The best source to figure out what is necessary to be submitted is the website of the county sheriffs. Some counties do not have any instructions at all. In that case, you must write your own. We make sure that we keep templates saved for each county in our forms library for quick access. As I mentioned in the The Nuts and Bolts of Wage Garnishment post, some county sheriffs will not serve bank levies. In that situation, or the situation where the county sheriff is overwhelmed (which is sometimes the case in Los Angeles and Sacramento), you hire a private process server to serve the levy. You would still have to have the process server open the levy with the sheriff, who is the official levying officer (where the return to the levy must be sent and funds from the levy must be sent). Once the levy is served on the proper bank branch, the bank has a certain time period in which it must submit a response to the levy to the sheriff. Occasionally, a bank will not respond to the levy, and in that case we will have to send them a friendly reminder that they need to respond or face a creditor’s lawsuit.

Once they respond with information on the levy, the judgment debtor is notified of the levy, and they have a certain period of time to claim the funds exempt. Once that time passes, if no claim of exemption is filed, then the bank turns the money over to the sheriff, and then the sheriff cuts us a check.

The real estate, mortgage and escrow industries frequently intersect with my business when someone needs to clear a judgment lien in order to finish a refinance or sale of a home.  I have found that most of these professionals do not know how to remove a judgment lien on real property after a judgment has been satisfied.    Most of these professionals incorrectly believe it is the responsibility of the judgment creditor.

A judgment lien on real estate is created when a judgment creditor records an abstract of judgment in a county where the judgment debtor has property.  A recorded abstract of judgment also attaches to all property the judgment debtor currently owns and all after acquired property in that county. 

When a judgment is satisfied by the debtor, the judgment creditor must file with the court a satisfaction of judgment.  If the creditor has recorded an abstract it must list the counties it was recorded in and the number of the recorded document.  Once this document is filed it is to be served on the judgment debtor.    However, the filing of the satisfaction of the judgment does not release the judgment lien created by the abstract of judgment.   The judgment debtor is responsible to record the satisfaction of judgment in the county where the property is held.  To accomplish, the judgment debtor needs to obtain a certified copy of the satisfaction of judgment and take it to the county recorder’s office and pay the recording fee.