Welcome to the California Creditor-Debtor Law Forum!

The purpose of this Forum is to provide a framework for the collection and discussion of creditor-debtor law in California, and to be a resource for collection professionals and debtor planners alike. The hope is that this Forum will develop with an objective view of the law, neither pro-creditor nor pro-debtor.

The descriptions of Divisions, Chapters, and Articles are those which are found in the statutes. However, the description of the statutes themselves has been added -- and may not always be correct or accurately descriptive. So, for instance, if CCP 697.350 is entitled "Lien On Real Property To Extent Of Judgment", that has been added by us, and was not found in the original legislation.

Please Add Materials Often. Again, this Forum is meant to provide a "framework" which invites additions of relevant information -- statutory changes, legislative comments to statutes, court opinions that interpret particular statutes, or even just a plain-English interpretation or one's opinion of the statutes. The more that is added, the more useful the Forum will become.

However, please do not add any copyrighted materials, unless you are the author and owner of the copyright and agree to waive the copyright. Note that there is no copyright for original government works, i.e., statutes, court opinions, etc.

Registration. The Forum can be read by anybody, but new posts will be restricted to professionals or academics who are involved with creditor-debtor law, including attorneys, judgment collection professionals, law students and professors, and the like. The registrations and contributions of governmental personnel, such as judges, briefing clerks, filing clerks, sheriffs and deputies, receivers, trustees, and those who act as "levying officers" are quite welcome.

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An Overview of

California Collection Law

The procedure for collecting judgments in California is mostly governed by the Enforcement of Judgments Law, usually referred to the "EJL". The EJL provides a framework for the basic remedies, including levies, garnishments, assignment orders, charging orders, and the appointment of receivers, etc.

In addition to the EJL, a variety of California statutes provide additional avenues for creditors to seek relief, such as the California Uniform Fraudulent Transfers Act ("CUFTA").

California debtors have little protection from creditors. While federal law caps the garnishment of wages at 25% of take-home, the California exemptions are sparse.

In a state where few homes are valued under $250,000 the EJL exempts only a minimal $50,000 for an unmarried person, $75,000 for a couple, and $150,000 for those who are disabled or over the age of 65.

Otherwise, California exemptions are minimal. Life Insurance policies have minimal protection, and most annuities have none at all. IRAs and qualified accounts are subject to the "means test" of CCP 714.115(e) that will leave most debtors uncomfortable in retirement. And pretty much nothing else has anything like significant protection.

Unlike most other states, the California courts in the larger counties are organized so that special judges, known as "Commissioners" sit in special departments that do little more than hear collection matters. But the EJL is set up to require a minimal amount of court involvement in the first place, allowing court clerks -- and sometimes even court reporters -- to sign orders than in many states might require a full hearing before a district judge.

It is the practice of debt collection that is difficult in California, mainly because so much of the burden is shifted to the "levying officer" (a/k/a overworked local sheriff's department) to go out and grab assets. It is easy to get a Writ, but much more difficult to get a deputy serve it, confiscate the assets, warehouse the assets until sale, and then finally sell the assets off at auction.

There are also legacy provisions within the EJL that can make it sometimes difficult to levy on a bank account, for instance, in a county were the original judgment was not entered. Thus, if debtor's cannot find solace in the meager exemptions from collections, sometimes they can hide behind the procedure to thwart collection and force a settlement for less than the full amount of the judgment.

Speaking of which, the post-judgment interest on judgments in California is a liberal 10%. Chuckling that they "can't get that sort of interest at a bank", many debt collectors will buy a judgment from a creditor, let the judgment sit in their files for some years until it doubles, and then out-of-the-blue surprise the debtor with a wave of bank account levies and liens. The debtor who lets a California debt linger is a foolish debtor.

Because California's population is so large, and seemingly more litigious than elsewhere, there are probably more court opinions that interpret collection matters than any other state. Thus, in addition to the ELJ and supporting statutes, there is a large body of case law to which litigants can turn to resolve certain issues.

Additional Pages

• Enter the Forum

• Overview of California Exemptions

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About Our Firm

The law firm of Riser Adkisson LLP practices in the area of creditor-debtor law in California from its office in Newport Beach. The firm practices both creditor-side (collection and enforcement) and debtor-side (defense). Contact:

Jay D. Adkisson

Partner

RISER ADKISSON LLP

100 Bayview Circle, Suite 210

Newport Beach, CA 92660

Direct: 949-200-7284

Fax: 877-698-0678

jay [-at-] risad.com

Please note that the firm does not accept judgments for collection that are less than $100,000 or on a pure-contingency-fee basis in most cases. Debtor-side representations are hourly only with a substantial deposit requried.

General questions should be addressed to:

questions [-at-] risad.com