Q: We have a judgment, and it is for quite a bit of money. How do we go about collecting?
L.F., Irvine
Ron Sokol
A: Over time, I have handled civil cases where we obtained judgment, sometimes sizable, but to date have not been able to collect. Unfortunately, that does happen; indeed, as the saying goes, “a paper judgment is only as good as the paper it is written on.” In addition, I have had civil judgments where the other party later sought to discharge all of their debts in bankruptcy (which in certain instances can be successfully challenged).
The good news, sometimes you do collect, if not the entire amount, at least part of it. Enforcement of the judgment may simply take patience, time and some expense, but, if it takes legal proceedings to collect, you can add most of those extra costs to your original judgment, so long as you do so within two years of when they are incurred (and have not filed a satisfaction of judgment).
Also, why go through the process of getting the judgment, and then let it go? The debtor may be hoping you throw in the towel. Instead, an initial step to consider: Communicate with the debtor. Does he want to resolve the judgment before you take allowable enforcement actions? It might well be to his advantage to do so.
Another step is to record an abstract of judgment in any California county where the debtor has a real property interest. An abstract of a judgment is a standard form you can find online. In time, you may get a call because the debtor is refinancing the property or selling it. Your judgment lien then has to be resolved. Also, if feasible (and economically sensible), you can move to foreclose on the property — that is, you could seek to ultimately take the title.
Further, you can serve an order for judgment debtor examination on the debtor. Here is a helpful online link: selfhelp.courts.ca.gov/small-claims/after-trial/collect-money/debtors-examination. The debtor is required to come to court to answer a multitude of questions, under oath, about his available assets, accounts, financial situation, his job, monies owed to him, whether he is part of any general partnerships, his cars, the like. Hire a court reporter if you want the question and answer session transcribed. Depending on what vehicle the debtor drove there, think about asking the judge right then for assistance to attach the vehicle. Note that if the debtor is properly served with the order for judgment debtor exam, and fails to appear, the court upon your request can issue a bench warrant for his arrest.
While these and other options are listed here, another step to evaluate is if a private investigator would be worth the cost. If you have information about the debtor, such as birth date, address or other identifying information, the p.i. might be able to locate assets and accounts.
Bottom line, if you know where the debtor banks, or has financial accounts, pursue a writ of execution (forms available online), and have a registered process server or the county sheriff serve the financial business. Seek to levy on the account. Similarly, you can seek to levy on at least a portion of the debtor’s earnings, if you know where he works. And, if your debtor has a business, you can seek to seize money and personal property there (you may even be able to have a “keeper” placed at the business for a period of time).
All this said, you may want a collection expert to take over the effort. Be aware the collection agent will seek a material portion of any recovery, on a percentage basis, but it is an option to consider.
Continuing: Does anyone owe the debtor money? Seek to have that money paid to you. Also, is the debtor party to a lawsuit where he may have recovery? You can file a lien in that case to have monies paid to you from any recovery to be paid to the debtor (the lien form online is referred to as AT-180). And you can file a UCC Notice of Judgment lien with the California Secretary of State. Online, look for UCC form JL-1.
The above information is not exhaustive, but sets forth some of the actions to consider in trying to collect a civil judgment. Remember, the judgment is enforceable for 10 years and is easy to renew. Also, the judgment may accrue interest at 10% per year, which can add nicely to the amount over time. Some states will honor a California state judgment. Thus, if the debtor moves to another state, you may still be able to pursue him there.
Finally then, the short version of this response: Getting judgment may just be step one. Seeking to collect may indeed take patience, determination and some expense, but could (and hopefully will be worth) the effort.
Ron Sokol has been a practicing attorney for over 40 years, and has also served many times as a judge pro tem, mediator, and arbitrator. It is important to keep in mind that this column presents a summary of the law, and is not to be treated or considered legal advice, let alone a substitute for actual consultation with a qualified professional.
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