We recently discussed the right to attach, a provisional remedy that enables creditors to preserve the value of potential judgments after a court action is filed but before it has been concluded. The attachment remedy allows commercial creditors holding unsecured claims (or claims secured only by personal property) to create judicial liens on debtors’ property before final adjudication of the claims sued upon. Creditors must strictly follow statutory guidelines in applying for attachments and establish prima facie claims.
As an experienced commercial collections attorney will guide you, in your request for attachment ask for after-acquired property (per CCP Section 488.405(c)). Keep in mind that this attachment is for equipment, farm products, vehicles, vessels and inventory of an on-going business.
The noncustodial method of attachment allows the creditor to obtain a secured position in the debtor’s equipment, farm products, vehicles, vessels and inventory in the debtor’s possession without having the sheriff take custody of the property and store it, making it an economical attachment. With respect to inventory and farm products, keep in mind that this type of attachment only attaches to inventory or farm products that have a unit value retail value above $500.00.
The way this attachment is performed is to simply prepare a California Secretary of State form AT-1 and attach a copy of your Writ of Attachment to it. Send an original and copy of the document with written instructions (signed by the attorney) to the Sacramento County Sheriff’s Department along with your original Writ of Attachment, copy of your filed undertaking, the appropriate fee for the Sheriff ($150.00), the fee for the Secretary of State ($10.00 – $20.00 depending on the number of pages) and prepared Notices of Attachment for service on the account debtor by the Sheriff. The Sheriff will file/serve the California Secretary of State and the Attachment is indexed with the Secretary of State and becomes effective as an attachment lien on the described property (once again the property subject to this method of attachment) as of the date of filing/indexing.
If your debtor business has vehicles, vessels, mobile homes or commercial coaches where a California Certificate of Title was issued, then Sheriff must file the notice with the California Department of Motor Vehicles or the Department of Housing and Community Development (the fee is $15.00) per CCP Section 488.385(a) to effectuate your non-custodial attachment lien. Also, if you need a quick attachment, consider hiring a private process server to open the file with the Sheriff and serve/file the AT-1 form. This type of attachment is a great way to protect your client because it allows the business to continue to keep operating but it can help to protect your client if the account debtor files bankruptcy.
For more information on the right of attachment or protecting your priority so that a judgment ultimately obtained will be enforceable against the attached property, contact experienced Los Angeles commercial collections attorney Ronald P. Slates today.