How to Turn a Paper Judgement into Cash: Tools for Collection

turning paper judgement into cash - collection tools

Winning the lawsuit and obtaining the judgement is only the first step. Many litigants have successfully won their case in court and obtained a money judgement, only to find that collecting from the defendant presents its own challenges. Why is it that so many money judgement awards go unsatisfied? Once a judgement is rendered it is up to the judgement creditor to pursue collection, and many judgement creditors are unable or unwilling to properly pursue the judgement debtor in order to collect on the judgement. In California there are several techniques available to collect.

Examination of Debtor and Third Parties. A judgement creditor may compel the debtor and third parties to answer either oral or written questions under oath as to the judgement debtor’s assets, liabilities and income in order to assist in collection efforts. Typically, this is accomplished by serving an examination order on the defendant (now judgement debtor) which compels them to show up in court. The creditor may use the examination to obtain a turnover order compelling the debtor to deliver assets to the levying officer (sheriff) enforceable by contempt. One possible disadvantage is that this procedure may “tip off” the debtor that his assets are being sought.

Judgement Lien on Real Property. The recordation of an abstract of judgement creates a lien on all of the debtor’s real property in the county in which the abstract is recorded and preserves the judgement creditor’s priority over later claimants. It is one of the most commonly used and cost effective enforcement procedures. It even attaches to after-acquired real property. One disadvantage is that abstract only creates a lien on the real property, but does nothing to obtain funds to satisfy the judgement. After recordation, the lien may then be enforced by levy and sale. Also, the judgement debtor will be made aware of the existence of the lien by either the county recorder or the judgement creditor.

Judgement Lien on Personal Property. A judgement creditor may create a lien on certain types of personal property by filing a prescribed notice with the Secretary of State. The procedure is similar to that used to perfect a security interest in such property under the Commercial Code. It also applies to after acquired property. As with the real property lien, additional steps must be taken in order to actually obtain the assets secured by the lien.

Writ of Execution. The most common enforcement procedure is to levy on the judgement debtor’s property under a writ of execution. If you can ascertain current information on the whereabouts of debtor assets, such as bank accounts, cash, jewelry or vehicles, the court may issue a writ of execution allowing the levying officer to take the property in order to satisfy the judgement. The major advantage of this process is that it reaches most property owned by the debtor, and authorizes the levying officer to take physical possession of the property for purposes of turning it over to the creditor or for sale.

Till Taps and Keepers. If the judgement is against a business, especially a retail sales business, a keeper or till tap may make sense. A keeper involves the levying officer installing a person at the store in order to take custody of sales proceeds on behalf of the judgement creditor. The primary advantage of a keeper is that it enables the debtor’s business to continue to operate while the creditor reaps the benefit. The disadvantage is that it is very costly for the judgement creditor as a large deposit may be required. A till tap is a one time seizure and does not involve a continuing leby.

Wage Garnishment. If the judgement debtor is employed, a judgement creditor may compel the debtor’s employer to withhold the nonexempt portion of the debtor’s disposable earnings for payment directly to the levying officer in order to satisfy the judgement. If the identity of the debtor’s employer is known, it is relatively easy and inexpensive to garnish a portion of the debtor’s wages. It may also be the only means to enforce a judgement where the other property of the debtor is exempt from levy. The sheriff collects the garnished wages, keeps a processing fee and then issues checks to the judgement creditor for the balance.

This is not intended to be an exhaustive list of the tools available to collect. You should also keep in mind that under California law, a judgement expires after 10 years unless renewed by the judgement creditor. You can contact me with any questions at or (310) 544-7161 for a free telephone consultation.

You may also like