Home > Collection tips

Collections tips

Your job: locate all their assets and legally seize them. 

If you read this page, and they have money, you can locate it and get it or force them to spend jail time until they comply with a court order to turn it over.

If you get a judgment assigned to you, you have to notify the debtor, but you can start the collection process immediately; you don't have to wait.

Page with documents I used to collect: Legal documents used for collections

The most powerful collection techniques

Locate their assets without their knowledge, then have process server or lawyer levy them. I recommend Peter Gilboy of judgment-trackers.com (619) 501-9199 and also Terry Gilbeau at checkmatereports.com: 1-800-675-6636. I suggest you stay far away from US Record Search.

0. Send them an e-mail laying out the consequences: I highly recommend this as your first step since it lays the ground work for the OSC contempt if they ignore it. The email should explain they need to pay you or disclose ALL their assets. Here is an e-mail I sent to fax.com's lawyer after winning 14 cases: CollectionEmail

.5 Open-ended keeper
If it is a real on-going business, try an open-ended keeper. One person wrote: It's called an "Open-ended keeper." The Sheriff installs a keeper in the morning. Once the keeper is installed, no assets may leave the building. If the defendant does not agree to pay, the keeper follows the creditors written instructions to inventory specified assets, such as computers, etc. and to haul them away for auction. The moving truck is only called if the defendant does not agree to pay (I've never had that happen). The deposit is $2,600. If they pay, the Sheriff only takes $205 of the deposit (and tacks that on to the amount collected from the defendant). See for example, see Optima Funding - case 15 - Sheriff open-ended-keeper2006_02_25.doc. They determine ownership AFTER they haul it away. If the defendant does not own it, it does not get auctioned off, but it still causes disruption of the defendant's business.

1. Bank levy, Wage garnishment, Assignment order, Turnover order, liens against property: If they have property, you should always file a lien against it using your judgments. Assignment orders are excellent vehicles to collect since they are easy to obtain in court and reach any sort of future income, e.g., your person is a consultant and has no wages to garnish. Turnover orders are very powerful, especially after a debtor exam. If they violate that, they are in contempt and can be jailed until they comply. Bank levy is easy to do using a process server, but you need their banking info which might be hard to get but there are some clever tricks you can use to find that out. Wage garnishment is a no-brainer if they are employed by a legit company.

2. Debtor's exam and third party exams: they have to answer the questions and you are interactive and can ask anything you want about their assets. Combined with a turnover order at the end of the exam, this can be very powerful. If they don't answer a question or answer falsely and you can show that to the judge, the judge (even a commissioner) can have the deputy arrest them under PC 166(a) for contempt. Then you get a turnover order directed right at them to deliver property they just disclosed to you. If they conceal assets, see the next item. You can do debtor's exams on third parties who know of the assets of the debtor as well (you just can't serve third parties interrogatories).

3. Jail them until they pay: If the person doesn't return SC-133 after 30 days, they are basically hosed. The SC-133 is already a court order so there is no need to ask the court to compel. So you go in with a noticed motion to ask for discovery sanctions (that a finding be made that because he hides documents, he must have the ability to pay) AND for the court to issue a turnover order, i.e., for him to pay you. You mail the turnover order to the debtor. If he doesn't pay you, you file an OSC re:contempt with the court. The judge signs it and you personally serve it on the debtor (personal service isn't required if you ask the court to allow substituted service). Then if he doesn't show at his OSC, he gets arrested with bail set at the judgment amount. If he does appear, he gets in jail until he complies with the turnover order. It's the closest thing to a debtor's prison you can get. If they don't comply with the court orders, they are putting themselves in debtor's prison.

If they've filed an SC-133 form that is incomplete or fail to respond to your written interrogatories or aren't responsive at a debtor's exam, then ask court to compel production. If still no answer OR if you can prove that their answer is wrong or incomplete (i.e., they are hiding something that you knew about that they didn't mention), you follow the steps above for sanctions That allows them sufficient motivation to find those assets they didn't seem to be able to find before.

A retired judge wrote this to me about discovering assets and people who lie and hide their assets:

yes, but you should be allowed to cross-examine him on the issue, find out about when he last filed a tax return, where he has bank accounts, etc. and then ask the judge to allow you to conduct some discovery before she rules on your use of 1219.  Then you can do some document production requests, and, if he fails to produce documents, as a sanction, ask that a finding be made that because he hides documents, he must have the ability to pay.  And then maybe 1219 kicks in. 

See Legal documents used for collections

4. Ask the court to appoint a receiver. The receiver would be given the power to 1) discover assets and 2) liquidate assets to pay any judgments. That will really piss them off because they totally lose control of how fast you are paid and the cost of the receiver gets added to the judgment. See CCP 708.620 and Calif Practice Guide, Enforcing Judgments and Debts,  4:850, 4:872, 6:1344, 6:1458. Take a look at these two documents which were signed by criminal court judge to aid my attempts to collect a small claims judgment:

5. Involuntary bankruptcy: 3 creditors can force a debtor into involuntary bankruptcy. If a debtor has 12 or more creditors, an involuntary petition needs at least three creditors who are owed a minimum of $10,775 in total. If there are fewer than 12 creditors – aside from employees, insiders and anyone getting preferences — only one creditor owed at least $10,775 is needed. See Facing Involuntary Bankruptcy - from Lawyers.com

6. Sister-stating: If they flee to another state and didn't leave assets in the state you got the judgment, you can sister-state your judgment in that state (file in the county they moved to) and apply the same techniques above.

SCAM RIPOFF WARNING - Be very careful of who you use to do searches!

usrecordsearch.com assetsearches.com http://www.bankaccountsearch.com/  US Record Search - background search, record search investigations is a scam as far as I could tell. See US Record Search.

Best way to get paid

The simplest way to get paid, as long as you don't mind doing contempt, is to get a turnover order and/or assignment order issued by the court. You can combine them all in one order if you want. This reaches all property they have (turnover) and all property that anyone is going to give them (assignment order).

So you can write a turnover order that says "debtor shall turnover to the creditor all money from every bank account or other financial institution account containing funds belonging to the debtor until the judgment is paid.

You can write an assignment order that says "debtor shall pay creditor 100% of any incoming funds (25% for incoming wages) to creditor until the judgment is paid"

When you don't get paid, it's bad news for them. You have an OSC re: contempt issued by the court and personally serve it on them. Then they get jail time of 5 days and they don't get out of jail until you get paid PROVIDED you can convince the court that they had the money and didn't pay. 

So it's a real incentive for them to pay you. This works for out of state debtors too and is nice because it reaches funds that may be held offshore or out of state.

If they ignore the OSC contempt, you can have a warrant issued for their arrest which is particularly effective if they have to appear in another case in your home state...they get arrested when they appear to defend their case. So if they don't pay, you can then rack up other cases against them with the advantage that they'll default on appearing and you'll win those cases (assuming you have other cases).

Great books

  • If you are going to collect, you MUST MUST MUST get the first 2 books
  • The NOLO book: "How to Collect When you win a lawsuit in California" (highly recommended)
  • www.collectfromyourdebtor.com (highly recommended)
  • www.judgmentrecoverycourse.com
  • The Rutter Group: California Practice Guide, Enforcing Judgments and Debts (sections in [] refer to this book). Used with permission.

Best practical advice

  • Don't try to do everything at once. Start with one thing on one case number. Only replicate to multiple cases simultaneously when you've proved you can execute on one judgement.
  • Keep filings really simple, e.g., motions should ask for only one thing ideally.
  • Keep contempt proceedings really simple, e.g., no more than "I just want a statement of assets returned. You should jail the debtor until he complies"; don't try to load on 15 counts of contempt and try to punish the debtor.
  • If your debtor is local, go for an OEX/Order to produce statement of assets. That is the path of least resistance and you then get a turnover order at the end without notice. If that fails, do a motion for an assignment order. It's then much easier to get if you've exhausted the usual remedy. If you try to do them at the same time, the clerks can get confused about which motion(s) you are bringing.
  • If your debtor is remote, you could start with a motion for an assignment order.
  • You have treat each case # as a separate case, e.g., 14 case means 14 assignment orders. Nice part in small claims is just file the motion form and then a proof of service of your moving papers. You don't have to file 15 copies of your moving papers.
  • If you are asking for assignment order, OEX, etc. make sure that you haven't already collected most of the amount due. If you have, the judge may not let you have it, e.g., if you've already done a bank levy on one case number, don't try to re-use that case number for getting discovery orders.
  • Be patient. It can take you 12 months to collect. But you're earning 10% interest in the meantime.
  • Debug your process with one case number, e.g., getting an assignment order of a particular form; then replicate the experience.

Contempt works! here's a story from a former Judge on his policy on sentencing for contempt

On child support, I never had a difficult case on that question. Either he clearly was down and out and couldn't have paid it, or he was jive. Other judges gave guys another chance to pay by next month or go to jail. If they had knew what the order was, had a job where they had some income and didn't pay, it was jail for at least five days. It is a terrible remedy, but refusing to support your children is even more terrible. Sometimes the guy was so used to judges who gave everyone more chances to figure out that a court order meant business that they were truly shocked when I sentenced them to jail. Sometimes they fought with the Deputy who attempted to put handcuffs on them. But I never had one of them back a second time.

Once I had a realtor whose theory was that he paid child support on the months he sold a house and didn't on the months that he didn't. He finished explaining his theory and I simply said "you are remanded into the custody of the Sheriff to serve fifteen days in jail (5 times 3 months of not paying). He went off to jail. The next day the D.A. in the family support division called me: "I have a certified check for twenty thousand dollars on my desk, are you willing to commute his sentence?"

Federal judgments

  • Nice thing about federal court is subpoenas, as long as place specified for production is local to the party, don't have to be domesticated at all. You just draft and send in any state.
  • Judgments are easily "domesticated" by filing in the district where the asset is. No service and no 30 day wait time.
  • You will use federal forms and appear in federal court for everything. It is never "handed over" to state courts.
  • Forms will usually be similar/same as state forms.
  • Rules for collection will be rules of the state you "domesticated" in. So it's just like with state courts, but all at the federal level with federal forms.
  • Contempt: if debtor doesn't comply, fed court can ???
  • subpoenas are issued by writing the name of their local federal court. No case # is required and you don't have to file a case.
  • The enforcement of federal court judgments is governed largely by state law. FRCP 69(a) directs that enforcement of federal judgments is to be in accordance with the procedure of the state in which the federal court sits.
  • Fed Rule 64 says all state remedies for debt collection are available.
  • severe contempt sanctions(see Federal Contempt Sanctions)

Bankruptcy key sections

Bankruptcy general

Involuntary bankruptcy

  • 3 creditors who are owed more than $10K can force a debtor into involuntary bankruptcy and a receiver can then be put in charge of the person's assets. There are risks. 

Voluntary bankruptcy, e.g., chapter 7 

  • Debtor can file for voluntary bankruptcy. 
  • Debtor has 20 days from the filing of the petition to file the schedule of assets.
  • Creditor has 60 days from the creditor's meeting to file objections to discharge
  • The debtor can plead the 5th, but if he does that too much, creditors may request dismissal of the case or denial of discharge.
  • Preponderance is all that is needed to establish concealing assets
  • See [5:157] for actions against debtor
  • Have to make a motion for a 2004 exam. You can examine anyone who might know about assets.
  • You have to file Proof of Claim to get any money.
  • Chapter 7 is for huge debts. 
  • Chapter 13 is if you are <$350K in debt. In Chapter 13, you can do a "superdischarge" and get rid of virtually all your debt.
  • You must stop collecting your judgment (including discovery) as soon as he files. Do NOT contact the debtor. Otherwise, you can be in big trouble (he can sue you). The rules of the automatic stay are in 362
  • Some debts, caused by fraud or malice are not discharable. Here is a list in 11 USC 523
  • A Chapter 7 debtor may also be denied a discharge of any kind (referred to as the “death penalty” in bankruptcy) if a creditor alleges and proves certain kinds of misconduct by the Debtor in connection with the Chapter 7 bankruptcy case itself. 11 USC 727. If you prove that, then the discharge is PERMANENTLY BLOCKED even if he refiles. So a debtor, by trying to defraud creditors in the bankruptcy by hiding assets, gets really screwed.
  • There are several grounds for objecting to a debtor's discharge, including:
         1. the debtor failed to keep and produce adequate financial records;
         2. the debtor failed to explain satisfactorily a loss of assets;
         3. the debtor made a materially false statement in his bankruptcy papers;
         4. the debtor failed to obey a lawful order of the bankruptcy court; or
         5. the debtor fraudulently transferred, concealed, or destroyed property that would have been property of the estate.
  • To get the death penalty, do the following:
    • get a credit report on them
    • subpoena the credit apps for the companies listed on the credit report, e.g., where the rented the car from, etc., who they got the house loan from. 
    • Hire a private investigator to find assets or get a former business partner to tell you stuff (in return for your not going after the business partner)
    • compare the assets there with what the debtor reported
    • trace how's he (and his supposed ex-spouse) are paying their bills, e.g., rent, car payment, internet site, cell phone, credit card bills.
    • if there are big discrepancies, you let the debtor do the talking and LATER call him on his lies. If you bring this up up front, the debtor can't lie and you won't get the death penalty against him
  • Declaration concerning debtor's schedules: Penalty for making a false statement or concealing property: Fine of up to $500,000 or imprisonment for up to 5 years or both. 18 U.S.C. §§ 152 and 3571.
  • Debts caused by malice or damage to property are normally NOT dischargeable
  • There is a creditor's meeting schedule for a month after the petition is filed. This is called a 341 meeting. See US CODE Title 11,341. Meetings of creditors and equity security ­holders). 
  • AFTER the creditor's meeting, you You can do a 2004 exam (named for the rule) where you in essence get to do a JDX. Here's the section: US CODE Title 11,Rule 2004. Examination

Badges of fraud

  • legit business purpose in making a loan
  • missing loan agreement
  • business making a loan to an individual
  • no payback schedule or interest payments
  • no term
  • unlimited amount of credit
  • You can show fraudulent transfer by inference. Fraud is an intent in the mind, so we look at actions of debtor. If they back date it 2 years, and the agreement is unreasonable -- 500K forever with no interest-- that's obvious fraud. If he hasn't made any attempt to pay it back, that could be fraud. And other things too...P

Finding their bank accounts

  • The Citizens Guide to Collecting Your Judgement has a terrific list of ways to find asset information about a debtor
  • Peter Gilboy is excellent in finding assets nationwide (including balance). If out of state (levy would require a sister state which would alert debtor), get a turnover order and force the debtor to hand over the money or go to jail.

JDX notes

  • You can ask any question that is calculated to lead to the discovery of assets, e.g., "how much $ do you have in your wallet?...can I see it?" are both legal.
  • If they own a dog, you can have the debtor turnover the dog or have sheriff seize the dog if and only if it is a pedigree (i.e., is something of value)
  • You can bring in anyone who knows about the debtor's assets or who owe's the debtor money into the debtor's exam, e.g., the debtor's boss or landlord, wife, sister, etc.
  • You may ask for the debtor’s social security number, bank account locations and balances, work address, other sources of income, computers, TV’s and autos owned. You may also ask about bank accounts that have been closed, spouse’s income, spouse’s bank accounts, and much more.
  • You get to add the cost of a court reporter for the debtor's exam to the judgment.
  • If the debtor doesn't bring everything in the subpoena, then you get to ask the judge to continue it until he brings EVERYTHING you've requested. Your job is to make their life hell because they didn't pay the judgment.
  • If they don't show, get a bench warrant for the amount of the judgment with "may post and forfeit" and "no cite and release"
  • You  can levy on tangible and intangible assets. For example, you can levy on the company name. The company then cannot use the name without being in contempt of court.
  • If the debtor doesn't appear, the court can order the debtor to surrender his passport to make sure he doesn't flee [6:1326.6]
  • You can examine third parties who know of the debtor's assets CCP 708.120. This can happen SEPARATELY from the JDX (See CIV057)

Debtor's exam checklist

  • Turnover order (bring a few copies)
  • list of questions to ask
  • if your debtor lies a lot, schedule a court reporter. Need a certified court reporter. Up to you to find and bring your own. However, ask court whether you need permission from the court ahead of time. may need to bring a motion with an affidavit showing good cause
  • send subpoena for documents and witnesses (you get as many as you need)
  • Trick: if you have judgments against the company and the CEO personally, set up 2 different debtor's exams, i.e., one for each. It gives you 2 shots at them.

Changing the name of the company

  • If they change the name of their company to avoid the judgment, you simply apply to the court to amend the judgment to add the "successor in interest"

Assignment order: for assets coming into the debtor, i.e., FUTURE income. This is the simplest, easiest way to collect from an on-going business. 

  • Serve (via mail to debtor) notice 16 days + 5 days (if via mail) the motion prior to your debtor's exam. When you finish the debtor's exam, you can then get your turnover order (ex parte) and assignment orders issued.
  • Unlike a turnover order which you can get "on the spot" after a debtor's exam, an assignment order must be via noticed motion so just get it set when you do the JDX paperwork.
  • 0nce you get it, you can serve it on the obligor via mail. Personal service is not required.
  • If the person is self-employed, he may not get a wage but may be a "consultant" to the company. No problem. Get an assignment order issued that orders company pay you. If they disobey, hit him with contempt.
  • Assignment order can also order the debtor to pay you after he's been paid. This is usually equally effective since If he disobeys, it's contempt.
  • Assignment orders are normally directed to the entity that owes the debtor and orders them to pay you instead of the debtor. If they don't comply with the order, you can then go after THEIR assets in a creditor's suit (ccp 708.210). But you can also direct it to the debtor (e.g., if the entity is out of state or will not comply).
  • You can also do a third party levy on that entity. However, that is a ONE-TIME event and only reaches money that they currently owe to the debtor. That is why an assignment order is preferred.
  • You can get the debtor to list all receivables and customers in the debtors exam
  • See ccp708.510
  • For an operating business with regular customers, best bet is to get assignment order against the biggest customers, e.g., pay directly to me (not the levying officer) 100% of any monies owed to the debtor until $xxx has been paid. That avoids having to do the contempt bit. You can serve them via regular mail!
  • More generically, you can direct to the company and require them to pay you xx% of their accounts receivable income until $xx,xxx has been paid. But if they don't execute (likely), you have to do the contempt bit which they can delay for months.
  • If you want to be easy on the debtor, you can specify that the obligor pay you on xx% of the amount owed to the debtor 

Best collection technique (using assignment order)

  • File a motion with the court to get an assignment order.
  • Next, prepare 2 assignment orders; one for business, one for personal.
  • Serve the motion and supporting docs on the debtors via mail since they've already made an appearance. They must file their objection at least 3 days before trial.
  • You have them pay you cash directly since you won't be able to determine who owes them the money.
  • At the motion hearing, you get the judge to sign the order You can mail it to the debtor. personal service is not required.
  • At the hearing, you also get the judge to sign an order that an OSC for contempt can be either sub served or served on their attorney. I have the Points and authorities that authorize this. That way, if he doesn't comply, you can easily serve him with the OSC.
  • Then you wait for the money.
  • If it doesn't come in, the court should force him to cough up the dough or sit in jail until he does.
  • In theory, this is the easiest way if you have a cooperative judge. You are out of pocket $15 for a motion fee and no travel to do a debtor's exam is required.
  • I believe this is the quickest and least expensive path to get paid, although it might be more "fun" to levy his assets.

Second best technique (using assignment order):

  • Another method that involves more time is to do a JDX and supoena their customer list. If they don't comply, they can be held in contempt, until they do comply.
  • Once you have their customer list, you have an assignment order directed to each customer. If the customer doesn't comply, you go after them for contempt. Somewhat harder to do in state court if the company is out of state. That's why I prefer the technique above.

Turnover order: for all assets currently under control of the debtor. This is easiest to get right after JDX.

  • If you already have a writ of execution, you can get this via noticed motion or, if the judge allows, ex parte motion. See CCP 699.040
  • CCP 708.205: At the end of the exam, you ask the judge for an order to the debtor to turn over to you any non-exempt assets. 
  • Turnover order should direct the debtor to turn the requested property over to the levying officer. It must be personally served on the debtor. It must warn the debtor that failure to comply can cause arrest and contempt of court.
  • Turnover order avoids levies, etc. and allows you to reach property that is out of state or even out of the country!! If the debtor doesn't comply, they can be put in jail (for contempt) until they do comply. Very powerful.
  • You get the writ of execution first (NOT writ of possession), even though it is property, e.g., writ of execution is used for house and cars too even though that is property. Once you get the order from the judge, file the writ + turnover order with the Sheriff and then serve the debtor with the writ, order, and exemption notice just like you'd serve a bank. File the proofs with the court.
  • See the NOLO book for detailed step by step.
  • Note that in small claims, when you file a motion form, only the one page notice form is sent to the defendant, not any of the attachments. You must serve these yourself and file a proof of service with the court.
  • It is PREFERABLE to get the turnover order immediately after the JDX and then serve it in the courtroom on the debtor. To avoid delays, you should already have a writ and ALREADY open a case file with the levying officer. The instructions should tell him to hold the writ for further levies. The court may also order cash to be directly turned over to the creditor. See [6:1337]. Debtor can claim exemptions after turnover [6:1349.1]. 

Seizure order

Garnish wages of non-debtor spouse

  • rutter book is out of date. unless there is a prenup making the wages separate property, it is community property and reachable if the debt was incurred during marriage. See Family Code 910 and CCP 695.020
  • noticed motion is required

Contempt fines

  • fines are levied by the court and collected by the court (they'd use their own debt collector)
  • judge can't give you the fine since the contempt was against the court, not you.
  • refusing to answer a question is a contempt; they can goto jail for 5 days, then get released and judge asks again, and they can go back to jail for 5 days.

Seizing Computers 

  • This is very county specific. Some will leave the data with the company. others will seize the whole machine.

Personal business

  • if the business isn't registered with the secretary of state anywhere, but is just a fictitious business, then business = owner as far as you are concerned. so you get 2 for the price of 1.
  • Likewise, if the business is used to make personal purchases, then you have an alter ego violation. if you had a judgment against the business, you can now go after the assets of the person. Or vice versa.

Interest on judgment

  • Interest starts accruing on the date of the original judgment, not the date of the last appeal. An appeal might reduce the judgment in which case it is as if the original judgment was for the corrected amount.

OSC re: contempt

  • Can get this on ex parte application to the court 

Jury trial

  • in civil cases for >$20, either side can request a jury trial and get it (but only in federal court)

Bench warrant and contempt

  • Bench warrant is just a court order to any peace officer in California with instructions on what to do. so when a person is arrested, they check the order to see what the instructions are. Each court issuing a bench warrant can have different sets of instructions to the sheriff in their county to process.
  • To get a bench warrant, follow the local procedure (i.e., ask the clerk). There is no statewide bench warrant form. For example, here are instructions they give in Sacramento to get a bench warrant for failure to show: Bench warrant instructions (Sacramento, CA). Here is the request form used in Santa Clara: Bench Warrant (Santa Clara). Here's the one used in Orange County: Bench warrant request (Orange County)
  • Here is what a bench warrant (for failure to appear at exam) actually looks like: Bench warrant (Sacramento) and  CV-39 Bench Warrant (San Mateo). For Santa Clara, the clerk just forwards the form and your check to the sheriff.
  • Bench warrants are easiest to get when a debtor doesn't show up for their exam. They have a time limit set by the judge. 
  • If he pays the judgment (or the debt is discharged in bankruptcy), YOU MUST contact the sheriff to have the bench warrant rescinded so there is no false arrest
  • In Sacramento, the warrant is written so that they will appear in front of a judge in the venue they are found in. If they post bail, they make a promise to appear at the judgment court. If they don't post bail, they are held. The local magistrate either transfers the person or allows him to post bail with a promise to appear in the judgment court. The San Mateo warrant cause them to be brought up to San Mateo.
  • Bench warrants are just statewide, but depending on where you are, they may not be actionable outside of your local area, e.g., if you have a warrant from Santa Clara and the guy is stopped in Los Angeles, he may not be held.
  • It is up to the sheriff's office whether a given warrant is entered into the multi-state system or not. Sometimes, you can drop by and ask that they do that for a given warrant. At some level, they are always entered, e.g., felony arrest warrants ALWAYS go multi-state.
  • In Santa Clara County, 99% of bench warrants have "we will extradite" which means if the guy is arrested in some other county, that Santa Clara county will pay to have the person sent back to Santa Clara where he will sit in jail until seen by a judge (which might take a week) for sentencing or for appearance.
  • You'll be notified if the guy is arrested or posts bail as to the date/time of his court appearance.
  • IIRC, if they're picked up on a failure to appear warrant, they're held until the court is contacted for disposition. The court, in turn, contacts the Judgment Creditor and asks if they'd like the perp in court immediately or on another date. After that's solved, or if they can't contact the JC, the debtor is allowed to post the bond.
  • If you try to exit the country while there is an arrest warrant out for you, that's a felony.
  • For maximum impact (you pay and forfeit the bail or you go to jail until your hearing), get the judge to endorse the warrant with all of these:
    • "no request": he can't say "hear it now"
    • "no walkover": he can't go walk his case over and schedule
    • "no cite and release": means he gets put jail until the hearing unless he pays the bail. Normally, on low bail amounts (as determined by the county where you are arrested), you just get booked and released with a promise to appear. On higher bail, he'd normally be required to post the bail to be released. Therefore, whether bail is required or not is a county-specific decision based on the county's threshold which is set based on how much jail space they have. So bail is set by the judge, but the enforcement of that is a county decision. Coding the warrant with no cite and release FORCES them to pay the bail or be held in jail no matter what the bail amount is in relation to the county's policy.
    • "may post and forfeit": means he can post his bail and choose to forfeit it and then does NOT have to appear, e.g., a traffic ticket is a good example of where you forfeit the bail and do not have to appear.
    • "will extradite" (i.e., your court will pay to have the guy brought here from another county within the state)
  • If you know where your person is, you can tell the Sheriff in that community where he can be found and fax them a copy of the warrant for his arrest. Depending on the county, they may or may not go to try to catch him.
  • A "corporate summons" is the equivalent for a corporation
  • what you really want (but cannot get) is:
    • nationwide scope (if he might move away)
    • extradite from another state (requires state or local prosecutor to get the Governor office to request from the other state's governor's office)
  • Phoenix Arizona Criminal Defense Attorneys - Criminal Cases discusses interstate and international extradition but that is for criminal cases, not civil. For civil, it won't happen. But judge can have the DA bring charges of criminal contempt. If he fails to appear, then, a misdemeanor arrest warrant can be issued. These warrants can cause extradition from another state, however it appears that many (most) states won't extradite unless it is a felony arrest warrant.
  • See [8.14] in small claims judge's benchbook. Civil bench warrant can be issued under CCP 1993. Or court can request that the DA file a complaint for criminal contempt under Pen C 166(a)(4). The court notifies the debtor to appear. If he doesn't, this allows the issuance of a regular misdemeanor arrest warrant which works for sure statewide.
  • For best results on out of state defendants, after you get the judgment, file an action in the county where the guy is located. that simplifies arrest.
  • Calif warrants are entered into WPS system. That is accessible on NCIC
  • warrants go to peace officers of the state. It is up to the local sheriff how they choose to handle out of state warrants.
  • California WILL extradite on a MISDEMEANOR bench warrant (i.e., fails to appear after he promised to) if the bail is high enough.
  • More info: call sheriff; ask for warrant/fugitive officer
  • Here's the summary:
    • In my county, according to the DA who handles extradition, extradition in civil cases is extremely rare (the guy doing it for 12 years has never done one and wasn't even sure it is possible)
    • Each case is evaluated individually
    • Only about half of the felonies will they extradite on; occasionally serious misdemeanors.
    • In general, unless there is jail time involved, they won't extradite
    • If the judge really wants the guy extradited in a civil case and has a good reason (e.g., to set an example), the DA will probably support that.
    • Most states will pick up a guy who has a warrant where he can be extradited, but it is a county by county decision, e.g., San Diego won't extradite even within the same state unless it is a felony and the bail is >$10,000
  • To have a guy arrested out of state, you have to have him entered into NCIC. But only felonies and "serious misdemeanors" qualify to enter. So you'd have to get your judge to ask the DA to file under CA Pen.C. 166(a)(4) and then, if he doesn't appear on that charge, have the warrant entered into NCIC. Then you can get a bounty hunter to find the guy, e.g., see http://www.fugitive-recovery.us/directory.htm for a list of bounty hunters. To be eligible for NCIC, the warrant must be extraditable; your state has to certify that it will send someone from your state to pick up the guy and bring him back. You can bypass the NCIC by having the DA in your area contact the DA where the guy is located and asking the judge to issue a warrant for extradition.See also: Bounty Hunter Power of Arrest and State Laws and American Bail Coalition Compendium Of State Bounty Hunter Laws. Under the UCEA, a private person can arrest a fugitive accused of a crime in another state for which the punishment is at least one year of confinement. But the accused must be brought before a judge or magistrate within 24 hours of arrest, whereupon he will be confined to allow for formal extradition process from the requesting state. All states, but two, Missouri and South Carolina, and two territories have adopted the UCEA. Since the late 80's, courts have said that UCEA also applies to bail fugitives.
  • The path of least resistance is to sister-state a money judgment in the debtor's home state and for anon-money judgment, file a civil case in the home state to get it enforced (the merits don't get relitigated).

Citizen's arrest

You can arrest them yourself if they've committed a felony. See CA Codes PC 837. For example,  two of them conspired to perform a misdemeanor is a felony (PC). If they caused more than $400 in property damage, that is a felony (PC (PC 594(b)(1). If they intimidate a witness (i.e., do that to discourage you not to testify), that is a felony. I've never done this and don't recommend it, but it is within the range of possible actions that can be taken.

Out of state debtors

  • best technique is to sister state your judgment in state where the guy is living because otherwise you can't enforce the court orders on the debtors. Or you can sister state where you want to do the levy but that is tougher because you can only get the assets and not get jurisdiction over the person.
  • Sister state is good (full faith and credit) only if the original court has jurisdiction over the subject matter and the person. If those things weren't litigated in the original court, the new court can examine them. (see Obispo Brito & a. v. James Ryan). The new court cannot examine the merits.
  • get a turnover order and serve on them
  • can also send them interrogatories and then force compliance
  • once in contempt, do an OSC re: contempt
  • if he doesn't show, court issues a bench warrant for his arrest on a FTA
  • if he's arrested out of state on FTA, they'll give him a court date in your court (but all the stars must be aligned for that to happen)
  • if he fails to show at that court date, judge may issue a MISDEMEANOR bench warrant (PC 1551) and set bail at $25,000. If he doesn't post the bail, he'll get extradited.
  • If he fails to show again at the third date, then he can get a warrant with no bail (or some really high value).
  • Bottom line: if he moves out of state, best to move the judgment and enforce locally. Here's why....out of state warrants depends on four things:
    • your county's extradition policy, e.g., some counties will never pay to extradite or ONLY extradite on felonies OR if certain conditions are met, e.g., bail > xxxx, type=misdemeanor or criminal, etc. sometimes, even if you meet that, it's on a case by case basis depending on the DA and/or sheriff decision
    • the state law in the state he's picked up in, e.g., if he's picked up in Calif, he can't be arrested for an out of state warrant unless it is for a crime in that state punishable by >1 year in jail (CA PC 1551.1)
    • the policy of the particular county he is picked up in, e.g., some counties will NOT process anything out of state or process only felonies on out of state. Most will not touch it at all (e.g., not even a cite and release) if the originating county will not extradite.
    • the debtor: he can object to extradition and then the DA has to do a governors warrant which he can't get out of. Those warrants may take 180 days to get someone extradited.
  • Note that if the guy goes to san diego, he will NOT be arrested on a ANY out of county warrant unless the bail is >$10,000 *and* it is a felony warrant!!!! This is due to budget issues and overcrowding in their jails. So even in the same state, it can be hard to get someone arrested, even for criminal warrants!

EXAMPLE USE OF CONTEMPT: ERIC WILSON

Note best bet is to sister state it where the guy lives and do a turnover order there! Example, Idaho has a turnover order statute:  Idaho Turnover Statute and Idaho Statutes TITLE 11 ENFORCEMENT OF JUDGMENTS IN CIVIL ACTIONS

Suppose debtor= eric Wilson. Plaintiff = mark klein

Wilson doesn't return statement of assets form (SC-133) to Klein as required by law.

Klein gets OSC re: contempt issued ex parte. This is served on Wilson via registered process server. That was the hard part...finding him for that OSC.

Wilson's a no show.

Klein gets a civil bench warrant issued by the judge. It's critical that the warrant not be a "may post and forfeit" since otherwise Wilson can pay and avoid having to show up to get his contempt sentence.

Now Wilson moves to Idaho.

But the warrant is entered into calif state WPS system as a non-felony so it is NOT available on NCIC. So you cannot call the cops in Idaho.

If you can find his assets in ANY state, get turnover order issued in the state he is currently in. That way, you force the guy to hand over his property no matter what state it is in, or he goes to jail. Property must be non exempt, of course.

Turnover order is easiest way to get out of state assets (or even out of the country!)...otherwise, debtor goes to jail until he complies.

Extradition notes

This is more for background for criminal felony cases. You aren't going to get someone extradited on a junk fax case so don't try it.

California will not extradite unless the bail is set high enough AND it is a misdemeanor warrant; states will NOT process the warrant UNLESS it is extraditable. Many states will not extradite (i.e., pick up the debtor) even on misdemeanor due to the cost.

If your warrant is entered in NCIC, it means your state will extradite. However, 80% of felony warrants are NOT entered into NCIC!! Some states, such as Washington, impose additional requirements.

The police can break down your door and enter forcibly if there is a warrant out for you and they have reason to believe you are there.

To find out the policy of a department, ask for the Fugitive Desk or Warrants Unit.

However, the state where the guy is staying may have a state law limiting what they can do, e.g., PC 1551.1 says California will only arrest a guy if wanted in another state for a crime punishable by death or imprisonment for >1year!

Stock levies

  • if the company is in california, you can levy the company to turn over the debtor's shares to you.

Selling the debtor's home

  • This is 99% to get them to pay you as long as there is equity in the house. Only an idiot would let the sale go through.
  • Cost is 10 hours upfront legal work (@ $325/hr using my lawyer who has done hundreds of these). Then you just wait to be paid.
  • If they are stupid enough to let the house be sold, you are paid from the proceeds (in order of lien holders)
  • First thing to do is check to make sure that their is positive equity in the house. If there is NOT, then the court won't let the sale go through. As long as you can reasonably expect to make a non-zero amount of money, the court will let the house be sold.
  • If the debtor doesn't settle with you, the house will be sold in anywhere from 120 to 180 days after you start.
  • You can't recover your attorney fees, but you can add "costs" of the levy to your judgment
  • First step: pay $325 for a title report on the property

Exemptions

  • In 2004, the limits went up on some items. It means the debtor can keep the last $x of that item that he has, i.e., you can't get everything.

Repatriation: getting out of state assets

  • Under CCP 695.010(a), court can force debtor to sign assignment order for out of state assets to assign it to the creditor so long as the court has jurisdiction over the debtor! See Ch 6 pgf 1345 of the rutter group calif practice guide on enforcing judgments.

Seize and sell (for business assets and/or inventory)

  • Instruct sheriff to do this explicitly; keeper is just to do a till tap.
  • You can have them seize and sell everything. Covered by Sheriff Procedural manual p. 4.09. Mover comes in and does inventory and tells you the cost to do.
  • all costs get added to the judgment
  • have to do separate writs, but can have one instruction.

Domesticating both Judgments and Orders

  • Constitutional law, interpreted through a long line of U.S. Supreme Court case starting in the early 1800’s, generally requires that the Courts of one State recognize as prima facie valid an Order or Judgment from the Courts of another State. Additionally, over the years various uniform acts have been put into place and adopted by most States (such as the Uniform Foreign Judgment Act). These various Acts set forth specific procedures to be followed in “Domesticating” an Order or Judgment from a Foreign Court. In the present case, if IRM ignores the Court’s Order we would petition Judge Hancock for sanctions. The Court has broad authority as to the sanctions imposed up to issuing a Bench Warrant for the arrest of certain responsible IRM Officers. Any such Order for Sanctions from Judge Hancock would then be taken to the appropriate California Court for a Hearing on “Domesticating” and enforcing the Order. IRM would have the opportunity to argue why the Order shouldn’t be Domesticated and enforced. Generally, such arguments concern procedural matters and matters of law (i.e. insufficient service of process etc.) rather than arguments based upon alleged liability.

Consolidation of multiple judgments into one

  • Bring a new action in regular court under CCP 337.5. People assign the judgments to me, then I bring a new action under 337.5 on an unsatisfied judgment against the debtor. This creates a new judgment. You can bring that suit in any place you got a judgment, but cleanest is to bring it where the debtor lives. Liens and levies using the old case numbers should be removed since the judgment is being replaced by a new judgment. Satisfaction of judgment can be filed when the new judgment is paid off.
  • You can also do a similar thing in small claims court. You can make a motion to Consolidate for the Purpose of Enforcement. That way, you can issue a SINGLE writ of execution. For example, here is some advice from a former Superior Court judge:
    • I suggest the next step by to move the court that all of the cases be consolidated for the purpose of enforcement. For this you need to fill out printed form SC-105 on the internet, serve the atty. for the defendant and file it with the court. The form is pretty easy. You will have to attach a sheet naming all of the defendants and their case numbers. Then: Notice to (defendant's name); Motion for (to consolidate the cases of the plaintiffs for the purpose of enforcement of the judgment. That upon appropriate application, the Sheriff of Alameda County is directed to issue and publish a Notice of Sheriff's Sale of Real Property according to Code of Civil Procedure section 701.570 as one consolidated case and to conduct any sale as one consolidated case at the same time and place. Said notice should include all of the above case numbers and the names and addresses of all judgment creditors together with the total amount of said judgment as shown on their Writs of Execution. Then: sign it. The court will set it for hearing and inform you of the date.

Levying trusts

  • If house is in the name of the trust, you can still put a lien on it. Simplest is to add the trust to the judgment via a motion to amend. A revocable trust can be reached by a creditor. An irrevocable trust cannot. See CA Probate Code section 18200.
  • another option is to use an affidavit of identity to have the name added to the writ and abstract of judgment.

Collecting against a business in Texas

See Gillman & Associates - a Texas law firm specializing in the collection of commercial accounts

The Texas Turnover Statute (Civil Practice and Remedies Code 31.002(a)) which can only be used against business entities, is specifically designed to aid a judgment-creditor whose judgment-debtor owns non-exempt property that cannot readily be attached or levied upon by ordinary legal process such as writ of execution or garnishment. It applies to property owned by the judgment-debtor, including present or future rights to property. This statute also provides for the appointment of a receiver with the authority given by the Court to take possession of and sell non-exempt property and pay the proceeds to the judgment-creditor to the extent required to satisfy the judgment.

The turnover statute has been used to reach corporate stock in the hands of third parties and held out of state; to reach shares of stock and accounts receivable where the debtor refused to attend two depositions regarding his assets; to reach an interest in a cause of action; and to reach an interest in future rental payments.

Sister state judgments

  • You can always sister state a judgment except for moving a default judgment into New York
  • Once sister stated, it is treated EXACTLY like a similar type (default v. contested) judgment as if it were issued by that court. This is the FF&C (Full Faith and Credit) clause of the Constitution. FF&C requires the state courts to treat the judgment _just_the_same_ as it would treat a state default judgment. So the foreign judgment *is* open to whatever post-judgment process that the state's default judgment would be open to. In some states, a default judgment can be reopened for up to a year after it was issued, for "good cause" and with a "meritorious defense."

Wilson strategy

  • 708.030 lets me inspect his documents CA Codes (ccp708.010-708.030). But he could just remove the documents I want so that is pretty useless.
  • Better are the written interrogatories: Debtor Interrogatories
  • Divorce severs community property; need to research whether it is when they file or when it is granted.
  • To determine whether property is community property or not, get a copy of the Deed (from a title company or call recorder's office)

General advice

Relevant documents

Interrogatories/ contempt

  • if debtor goof up by lying or omission, do an OSC/contempt. if no show bail=judgment amount and a long time till the hearing
  • If you have a GOOD judge and the scumbag move around his funds after exam, the judge may let you examine him again. "good cause" is totally dependent on the judge.
  • EVEN BETTER: If he goofs off, ask the judge for an order to have the debtor notice you via fax at l1 to 2 hours before he moves any funds between account and specifies how much he will move until you are paid in full. Another thing is to levy everything but $1. If he doesn't pay you the $1 on his own, you get to track his assets with this order forever, e.g., for other people. All perfectly legal.
  • some judges think interrogatories are equivalent to debtors exam, so you can do one or the other, but not both. others will let you do both.
  • Judge cannot order the debtor to wire the funds to your account. The reason is that there is no statutory basis for issuing such an order!!! Judge can issue a judgment, but you are on your own regarding collection.
  • federal judges have more power and may be able to hold a debtor in contempt until he wires the funds back (on a fraudulent transfer).

Subpoena

  • if you subpoena his financial records to find out where the funds went, but the time you get the info, he's had time to move the money. So you are ALWAYS one step behind.
  • The alternative is EX PARTE apply to the judge for a court order to send you the bank statement and not notify the customer. You are clearly entitled to this post judgment so should be easy to get EX PARTE and there is good cause if he has a track record of moving funds out.

Debtor's exam question (also useful in written interrogatories)

See also

Other Subpoena/interrogatories

  • If you got divorced, get a copy of the divorce agreement so you can see the alimony and who is paying who

Objective

  • Determine the source of income allowing them to pay their bills/mortgage/rent
  • Find out who owns house and cars. If leased, where is the cash coming from to pay for it?
  • Find out where the person works (all places) and how much they are paid. Get statements.
  • Find out all investment accounts and amount in each. Get statements.
  • Get a list of all seizable assets in the home

Things to demand of all Defendants (even if you don't do a debtor's exam)

  • Statement of assets form (SC-133) filled out completely and accurately
  • post-judgment subpoena (look at the assets form for ideas on what to ask for: bank statements, home purchase agreements, all lease agreements (to verify what *is* leased and allow you to discover what he said on his lease forms), alimony arrangements, divorce agreements, etc
  • up to 35 written interrogatories (select from stuff suggested at debtor's exam links above)

Finding a new address

Address service requested or "return service requested" are both ways to find a new address. See Ancillary Service Endorsements.

Over levying

If you over levy and have a second judgment, then you can apply the over levy to the other judgment by levying the person who has the excess money, e.g., you can instruct the the sheriff to levy himself since if has the debtor's property or if the debtor overpays you, you then instruct the sheriff to levy yourself in order to get the money applied to the other judgment.

fax.com collection method email

Eric Wilson got "divorced" according to statements made by his wife. yet he still seems to live in the same house as his wife. and he drives the same car (which she says she owns). and he uses his wife's address as his official address.

This is a common asset protection device. Wife gets all the assets and loans eric the car and lets Eric stay at the home because he is homeless. Eric gets zero out of the divorce because he felt so bad about it...he thought his wife deserved to keep everything.

Since wife isn't working, will be interesting to subpoena that divorce settlement see the alimony arrangement and understand how she gets income and how eric affords the alimony.

Mark Klein (who has a judgment against Wilson) will probably subpoena the divorce documents, etc. as well as require his former wife as a witness at Wilson's OSC/contempt hearing up in Palo Alto which will be soon.

At the OSC hearing, Klein may also ask the judge if Klein can examine Wilson on the spot as well as his wife, since they are up there anyway, failed to fill out the documents, and we've subpoenaed documents for his OSC hearing need for his Examination. This is perfectly reasonable since Klein shouldn't be forced to do an exam down at Eric's location is Eric is the one in contempt. Eric should have to pay a price for his contempt.

Also, if wife has all the assets, then it might be a slam dunk. Klein could get the judge to allow an affidavit of identity that they aren't really divorced so could directly levy the wife's assets. In superior court this is much tougher to do, but in small claims, this is possible and has been done (and it is certainly consistent with the spirit of the law).

Should be interesting.

Anyone have any other suggestions for dealing with this situation?

Also, probably the best way to collect against fax.com is sue all the principals individually in small claims court.

When you win, they *ALL* have to return a statement of assets (SC-133), or you do an OSC/contempt everytime they fail to comply. They also have to respond to 35 written interrogatories every 120 days and as well as after trial subpoenas for documents related to his finances. If they don't, same deal. You get to ask the judge to sign an OSC to haul them up to YOUR courtoom.

This saves the hassle of a normal ORAP which we'd have to do at his location if we did it since he's >150 miles away.

If any of the principals fails to show up at the OSC, we get a bench warrant for the full amount as bail for each person who fails to show. So we only need one arrest to collect the full judgment.

If they do show up and fully comply, we follow the money and levy assets OR focus on the non-compliant people

If they show up but the documents are not complete or are wrong, we reset the hearing date till tomorrow each time until we get full compliance or a no-show (i.e., bench warrant for full amount of the judgment).

If we follow the money and they didn't list the assets, we go for an OSC/contempt and repeat the process.

At some point, they get the message. they *all* spend all their time in MY local court, in jail, or they comply and tell me where ALL their assets are.

Mark Klein got a signed OSC/contempt because wilson failed to return the assets form. So the process has begun.

Here's what he filed when wilson failed to mail back the form on his assets:
http://www.junkfax.org/fax/action/WislonOSCcontempt.doc
http://www.junkfax.org/fax/action/WilsonOSCcontemptAffidavit.doc

This only works if you have a GOOD judge. The Palo Alto judge is EXCELLENT. He's very fair and he will enforce the law when people break it.

You can do this and it is all perfectly legal.

Any holes? let me know off list.

Thanks.

Collection misc

http://www.courtinfo.ca.gov/forms/documents/ej105.pdf 

http://www.courtinfo.ca.gov/forms/documents/ej110.pdf 

The above two forms, and others, are available at the official site:

http://www.courtinfo.ca.gov/forms/

Also available at:

http://forms.lp.findlaw.com/states/caej_1.html

Background information is plentiful. E.g.:

http://bankruptcy-law.freeadvice.com/collections/enforce_judgment.htm

http://consumer-affairs.co.la.ca.us/SmallClaims/Frame.htm

Some counties have their own forms, e.g.:

http://www.sandiego.courts.ca.gov/download/superior/forms/civ119.pdf

http://www.sandiego.courts.ca.gov/superior/online/form_cv.html

http://sccounty01.co.santa-cruz.ca.us/supct/courtweb1/formspdf/supcv0511.pdf

http://courts.countyofventura.org/vn049.pdf

http://www.saccourt.com/forms/forms/postjudgement/c92.pdf

http://www.co.monterey.ca.us/court/pdfs/local_court_forms/Clerk-74.pdf

I DO NOT ENDORSE ANY OF THE FOLLOWING. I MERELY MENTION THEM FOR EDUCATIONAL PURPOSES:

Of course, attorneys provide judgment enforcement services; see, e.g.:

http://www.lawguru.com/cgi/bbs/attyPages/lrothman.html

Some non-attorney people make a living at enforcing and collecting
judgments:

http://www.fundfindersusa.com/out-of-state.htm

http://resultsrecovery.com/

See also the above link's further info at:

http://resultsrecovery.com/service.html

And:

http://www.speedysearch.net/judgmentrecovery.htm

http://www.ejudgmentcollector.com/faqs.html

Debtor exam documents

Assignment orders, turnover orders, OSC contempt, written interrogatories, etc

OSC re: contempt filings

Other useful pages:

Junkfax.org home