In California, a creditor can pursue a prejudgment attachment against a natural person if their claim is 1) commercial, and 2) based on a contract. If a creditor is concerned that their debtor may try to hide assets to avoid paying out on a debt, a prejudgment attachment can attach to a person’s real estate or inventory (or anything that a company owns) and secure their payment.
If you’re considering a prejudgment writ of attachment to help protect your ability to get paid on a commercial debt that’s owed to you, you must make sure that you meet the legal qualifications. Here’s what you need to know.
Civil Action Worth at Least $500
The first qualification is to file a civil action with money damages of at least $500. This can include costs and fees associated with the matter. These fees do not have to be fixed at the time of filing. You must be able to prove that it will total at least $500.
The Debt Cannot Be Secured
When a debt is secured, there is collateral that may be collected to pay for part or all of the debt. To qualify for a prejudgment writ of attachment, the debt in question must be unsecured. The only exception is if the collateral has no value or the value is less than that of the claim, which you as the creditor must prove.
Debt Must Arise Out of Trade, Business, or Profession
Although a prejudgment writ of attachment may be issued against a person or a business, the debt must arise out of trade, business, or a profession.
Creditor Must Prove Their Right to Attachment
State law requires the creditor to prove that they have the legal right to attach the debtor’s assets. This is often done by using the services of a qualified commercial collections lawyer.
Giving Proper Notice for the Prejudgment Hearing
The debtor must be lawfully served served at least 16 days before the date for the hearing is set. The debtor’s notice of opposition must be filed and served at least five days before the hearing is to take place. In some instances, the creditor may apply for an ex parte hearing to a temporary protective order. However, they would need to prove that they would suffer great or irreparable harm if they are unable to get an immediate prejudgment writ of attachment.
Learn More about Your Commercial Collections Options
To learn more about your commercial collections options, including whether a prejudgment writ for attachment is right for you, contact experienced commercial collections attorney Ronald P. Slates today.