Judgment Liens And Abstracts Of Judgment Creditor Debtor Judgment Enforcement Collection

Adkisson's CREDITOR DEBTOR LAW An Overview of Creditor-Debtor Law and Judgment Enforcement Techniques

CAUTION STATE LAW VARIANCES

Judgment enforcement law is notoriously non-uniform between the various states.

 

Judgment Liens and Abstracts of Judgment

A lien establishes ("attaches") the creditor's judgment interest in an asset of the defendant. Once the judgment lien has attached to the debtor's asset, the creditors interest in the asset is superior to that of all third-parties who had knowledge of the lien. If the creditor's lien has been filed of public record, third-parties are deemed to have "constructive notice" of the lien.

Some number of judgments are collected by the creditor doing nothing more than obtaining a lien on some valuable piece of property of the debtor. For instance, a creditor might establish a lien on a piece of valuable real estate that the debtor owns, and the would receive up to the amount of the judgment, plus interest, when the property is eventually sold by the debtor.

An Abstract of Judgment is a form that is filed by the creditor with the county recorder's office, and which establishes a judgment lien on all the debtor's interest in real estate owned then or thereafter in that county, i.e., if the creditor has filed an Abstract of Judgment and the debtor subsequently buys or inherits a piece of real estate in that county, the Abstract of Judgment would attach to it. Since the Abstract of Judgment shows up in the title records, it means that the debtor cannot convey good title to some third-party purchaser of the real estate, and so therefore must deal with the creditor before being able to sell the property. The downside to an Abstract of Judgment is that it is only effective in the county where it is filed, so creditors will frequently file Abstracts of Judgments in the debtor's county of residence, surrounding counties, and in any other counties where the debtor might have real estate. It is also only effective as to an interest in real property.

Some states allow a lien on the debtor's personal property in the state to be created by a special filing with the Secretary of State's office. These filings create judgments liens on personal property only, and are very similar in their form and effect to a U.C.C.-1 filing. They typically do not cost much to file, but sometimes they can make a difference, particularly if two creditors are squabbling over the same asset.

 

 

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SITE PAGES

 

ABOUT JUDGMENTS - Overview of judgments as they relate to judgment enforcement.

 

Collecting Default Judgments - Special considerations for default judgments.

 

Form of Judgment for Collection - Getting the form of judgment right can make collection easier, and getting it wrong more difficult.

 

Judgments On Appeal - Is a judgment enforceable when it is being appealed? Maybe. Appeal bonds a/k/a supercedeas bonds also discussed.

 

 

JUDGMENT ENFORCEMENT DISCOVERY - It's difficult to collect against the debtor's assets unless you find them, and it can be difficult to find them.

 

Private Investigation - Non-judicial methods of investigating the debtor's assets and affairs, including database searches and the use of private investigators.

 

Written Discovery - Some states allow for written discovery to be propounded to a debtor, which is a good way to start accumulating information from the debtor, or at least what the debtor claims is his assets.

 

Debtor Examinations - The traditional way of obtaining information from a debtor, which is to haul them into court, sit them down at a table, and ask questions point-blank about assets and income.

 

Third-Party Examinations - Means of obtaining discovery from third-parties about the debtor's assets and affairs.

 

 

JUDGMENT ENFORCEMENT REMEDIES - The primary methods for taking assets and income away from the debtor.

 

Judgment Liens and Abstracts of Judgment - Ways of freezing assets so that they cannot be easily transferred away pending execution.

 

Writ of Execution - This document authorizes the Sheriff to make collections on behalf of the debtor, and some other stuff.

 

Writ of Garnishment - Used to collect wages and against income streams in some states.

 

   Federal Wage Garnishment Law (FWGL) - 15 U.S.C. sec. 1671 provides nationwide wage exemption.

 

Writ of Levy - The remedy that allows the Sheriff to grab the asset and auction it off on the courthouse steps.

 

Charging Orders - The "exclusive" remedy against a debtor/member's interest in a partnership, limited partnership, or limited liability company.

 

Assignment Orders - An order used to intercept income streams, such as advertising revenues, royalty payments, etc.

 

Creditor Suits - Actions taken against a third-party who has possession of an asset that is still titled in the name of a debtor, or who has violated some other enforcement process.

 

Receivers - Often the end-game strategy to take a difficult debtor down, by having the court appoint a neutral with all the powers of the debtor, such as to sell season football tickets, or dissolve corporations.

 

 

OTHER JUDGMENT ENFORCEMENT THEORIES - While technically not "remedies", these bodies of law are often used in judgment enforcement proceedings.

 

Alter Ego and Veil Piercing - Cutting through corporations, trusts, and LLCs which are simply the debtor himself in another form.

 

Voidable Transactions (was Fraudulent Transfer and Fraudulent Conveyances) - Used where title has been transferred to a third-party.

 

 

OPINIONS -- Interesting opinions in creditor-debtor law.

 

Debtor Examinations

     Kyne v. Eustice, 215 Cal.App.2d 627, 30 Cal.Rptr. 391 (1963).

Garnishment/Wage Exemptions

     In re Foster, 556 B.R. 233 (Bk.E.D.Va., 2016).

Trusts

     Church Joint Venture, L.P. v. Blasingame, 2020 WL 284527 (6th Cir., Jan. 21, 2020).

 

LAGNIAPPE - A potpourri of stuff.

 

OTHER INFORMATIONAL WEBSITES

BY JAY ADKISSON

 

  • Jay Adkisson - More about Jay D. Adkisson, background, books, articles, speaking appearances.

 

  • Captive Insurance - Licensed insurance companies formed by the parent organization to handle the insurance and risk management needs of the business.

 

  • Asset Protection - The all-time best-selling book on asset protection planning by Jay Adkisson and Chris Riser.

 

  • Voidable Transactions - Discussion of the Uniform Voidable Transactions Act (a/k/a 2014 Revision of the Uniform Fraudulent Transfers Act) and fraudulent transfer law in general.

 

  • Private Retirement Plans - An exploration of a unique creditor exemption allowed under California law which can be very beneficial but is often misused.

 

  • Charging Orders - The confusing remedy against a debtor's interest in an LLC or partnership is explained in reference to the Uniform Partnership Act, the Uniform Limited Partnership Act, and the Uniform Limited Liability Company Act.

 

  • Protected Series - An examination of the single most complex statutory legal structure yet created, with particular reference to the Uniform Protected Series Act of 2017.

 

  • California Enforcement of Judgments Law - Considers the topic of judgment enforcement in California, including the California Enforcement of Judgments Law and other laws related to California creditor-debtor issues.

 

  • Anti-SLAPP Laws - A collection of and commentary about Anti-SLAPP laws and significant court decisions on the subject within the United States, with special California Anti-SLAPP section.

 

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© 2020 by Jay D. Adkisson. All Rights Reserved. No claim to original government works. The information contained in this website is for general educational purposes only, does not constitute any legal advice or opinion, and should not be relied upon in relation to particular cases. Use this information at your own peril; it is no substitute for the legal advice or opinion of an attorney licensed to practice law in the appropriate jurisdiction. This site https://creditordebtor.com  Contact Jay Adkisson by phone to 702-953-9617, by fax to 877-698-0678, or by e-mail to jay [at] creditordebtor.com