Archive for the ‘Collection’ category

Bank Levy Limits

March 2nd, 2010

How much can a creditor levy upon your bank account? The answer depends on a number of factors:

The first, is the amount of the judgment awarded and who it is awarded against. If the judgment is awarded against you then the limit is the amount of the judgment and how much you have in the bank account being levied upon.

For example, if you owe $5000.00 according to the Judgment and the Judgment is against you and the creditor levies upon a bank account in your name and there is $10000.00 in the bank account, then the creditor gets the $5000.00 plus interest at the rate of 15% from the date the Judgment was entered plus the cost of obtaining a Writ of Execution ($25.00).

Using the same facts as above but this time you only have $2,000.00 in your bank account then they get to take the entire $2,0000.00. The $2,000.00 is applied against the amount owed in the Judgment. The creditor can then go after your other assets or this bank account until the judgment is satisfied.

The limits are that the creditor can only go after bank accounts in the name of the individuals or entities named in the Judgment. So if the Judgment is against WHO, INC. and you have a personal bank account in the name of John Doe. They can’t levy on your personal account because John Doe is not named in the Judgment.

But they can go after any bank account in the name of Who, Inc.

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Posted in Collection, Information, Judgment

Collection Attorney Negotiation

February 17th, 2010

This question was posed to me recently: Do Collection attorney handling a collection matter negotiate?

The answer is: Generally they do. It all depends on their client (your creditor). The bottom line is all offers made by you to them must be presented to the client. So say you owe $500.00 and you tell the attorney that you want to settle for $50. Although the offer is crazy, he still has to let his client know about it and the client then has the option to give you a counter offer and the negotiation process begins.

Most collection attorney want to settle their case so negotiation is always encourage because it saves every one’s time and money.

So if you have a debt and an attorney contacts you or file suit against you, it is always a good idea to call, write, or email to see what can be done to work out a deal. You are better off avoiding the Answer fee and putting it toward your settlement payment.

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Posted in Collection, Information

Prejudgment Interest

January 17th, 2010

Many people have asked me this question so I thought that I would post it here so that they can get the answer here. The question is:

“Can I get prejudgment interest on my collection case?”

The answer is yes and no. A creditor who prevails on a common count but not a contract cause of action may not recover prejudgment interest at the contract rate. So if you have a contractual agreement with the debtor, you can sue for a breach of contract and seek prejudgment interest.

If there is no contract and you are just suing for services rendered or for merchandise sold and delivered than you can’t get prejudgment interest.

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Posted in Collection, Information, Judgment

Statute of Limitation On Debt

January 12th, 2010

Every state has laws governing the time in which a person or entity can file suit to collect a debt. Generally, a creditor or debt collector gives up their right to file suit to collect a debt after four years after the debt is written off. In the case of open book accounts, its from the date of the last entry on the statement of accounts.

The purpose of the statutes of limitation is to bring some measure of fairness to the debtor so that he/she (1) will not have to worry about being sued for the rest of their lives; and (2) so that the debtor can properly defend himself with fresh evidence and witnesses, if any.

This doesn’t mean that a creditor cannot file suit against someone after the statute of limitations has expired; however, if a creditor does file suit, the debtor can ask the judge to dismiss the suit on the grounds that the statute of limitations has expired.

If you are a debt buying, you better pay attention to the dates on each account and see when the statute of limitation runs out. If you are a debtor, if the statute of limitations is about to run on your account, don’t be surprised if you suddenly hear from a collection agency threatening to sue if you don’t pay immediately.

If they do contact you, tell them that the statute of limitation has run out and to not contact you again. If they continue, send them a certified letter with return receipt requested, telling them not to contact you again. Whatever you do, never admit that you owe the debt or agree to pay the debt or send them any money. Confirming the debt, agreeing to pay the debt or sending them money can extend the statute of limitation and allow them to come after you.

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Posted in Collection, Information, Statute Of Limitation

Real Property Lien

January 12th, 2010

Assuming you already have a Judgment against a person, you can place a lien on any real property that they might own or acquire after the lien is in place by obtaining and recording an abstract of judgment in the county that they either reside or that you think they might own property in.

The cost of an abstract judgment is only $25.00. The fee to record it in each county varies. In Los Angeles county the fee is only $25 for the first two pages. $27 if three pages.

Once the abstract of judgment is recorded, the judgment becomes a lien on real property located in the county of recordation regardless of whether the property is owned by the judgment debtor at the time of recordation or is acquired later.

The abstract of judgment is a judicial council form provided at the court’s website. The form is rather straight forward. It asked when the judgment was entered, the amount, the name and address of the debtor, the county in which you want to record the abstract, their social security number and driver license if you know it, your name and address (so that they can contact you in the event they want to pay off the lien), and the name and address of the debtor where you originally served them with the summons and complaint.

Just fill that information and file it with the clerk’s office. Once you get that back, you send it to the county recorder’s office to record it. And that is it.

If you suspect that the debtor might reside in more than one county or has property in multiple counties then get a abstract of judgment for each county and record them in each county to ensure you cover all your bases.

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Posted in Collection, Judgment

Mutual Funds & Securities

January 11th, 2010

Judgment enforcement is always a interesting topic. Many people manage to obtain Judgment against debtors or entities but that paper means nothing if you can’t enforce or collect on the Judgment.

Today we are going to approach the topic of how to enforce a judgment and collect on mutual funds and securities held by an individual. Mutual funds and other investment securities are managed or are part of large organizations that may not reside in California. If you have a debtor that owns mutual funds and securities, you have to ascertain where the CEO for these organization reside. Where their CEO resides is where you have to get a writ of execution and to levy on the securities.

For example, if your California judgment debtor owns mutual funds in an Asian small cap fund, and the CEO of the company that runs the small cap funds resides in New York then, your writ of execution and levy cannot attach to those securities. You will have to take your Judgment get it recognize in New York as a sister state Judgment. Then get a writ of execution in New York and levy there.

So when you deal with mutual funds and securities you must ascertain if they are located before you can consider going after them in California.

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Posted in Collection, Information, Judgment