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A Primer on Collecting a Judgment in California

Often times, a judgment creditor will complain that he/she may have a money judgment from the Court stating that a judgment debtor owes them money, but that the debtor fails or refuses to pay.  Winning the litigation and getting the judgment is sometimes only half the battle. 

Legally speaking, a judgment is an obligation resulting from verdict: an obligation, e.g. a debt, that arises as a result of a court's verdict contained in a document setting out an obligation of this kind. In order to obtain a judgment against a debtor, a creditor or collector must take the debtor to court. If the debtor loses or does not respond, the court will issue a judgment in favor of the creditor or collector. The judgment will be filed with the court, and once that happens, it is public record. The negative effects to their credit and public embarrassment are often not enough to motivate a debtor to pay up.

What is a creditor to do? Retain commercial collections attorney Ronald P. Slates. 1436237883_house119.png

There are several options to collect a judgment and each has its benefits and costs, and may or may not be available, effective or prudent to use, depending on the financial situation of the debtor.  It is important for judgment creditors to have a competent creditor attorney to help them determine the best course of action, and to monitor the judgment debtors until the debtor pays, or money is collected.

A money judgment in California is good for ten years (Code of Civil Procedure Section 683.020).  California is one of the few states that allow a renewal of a money judgment, without a maximum on the number of renewals.  The judgment must be renewed before the time to enforce the judgment expires (Code of Civil Procedure Section 683.130(a)), and cannot be renewed if the judgment has been renewed within the last five years (Code of Civil Procedure Section 683.110(b)). 

There is a benefit to the Judgment creditor of renewing early and often in that the Judgment earns interest from the time the Judgment is entered until it is paid.  Interest earned is simple interest, as it does not compound.  When a judgment is renewed, the unpaid interest is added to the principal amount due and interest is now earned on the new principal.  Additionally some costs paid by the debtor may be included in the new principal of the money judgment.  Renewing the judgment has the effect of compounding the interest earned.

For assistance on collecting a debt owed to your business, contact aggressive commercial collections attorney Ronald P. Slates today at 213.624.1515.

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