Enforcing a Judgment via a Car Levy

Once a creditor files a lawsuit and is awarded a judgment by the court, the creditor has several options to satisfy its debt. You can garnish wages or levy a bank account. You can also obtain a judgment lien and place it on real property such as a house or even personal property such as an automobile.

In California, a lien is a property right that secures a creditor’s right to payment. Liens must be perfected, which is the legal process to make a security interest effective against third parties or to retain its effectiveness in the event of default by the party granting the security interest.

A lien converts an unsecured debt into a secured debt, providing a creditor with additional tools to collect its debt. A lien allows for a debtor’s personal property to be sold. Depending on the value of the personal property, this allows a creditor to potentially satisfy the debt in full instead of having to wait to satisfy the debt in monthly increments with a garnishment or levy. Discuss the pros and cons of each debt collection method with an experienced commercial collections attorney.

Personal Property & Liens

Executing on personal property that is the subject of a judgment lien also requires the county sheriff to come to the debtor’s residence and inventory and appraise any personal property for sale. Because a car is considered personal property, any lien that is placed on a debtor’s personal property will apply to and cover a motor vehicle.

If you are interested in filing a lien on a motor vehicle, you will need to…

1. Locate the physical location of the car. You will also need the license plate number, VIN, make, model and color of the car.
2. Determine whether there is any equity in the car. The Judgment debtor may file a Claim of Exemption, and lien holders may file Third-Party Claims.
3. Obtain an issued Writ of Execution in the county where the car is located.
4. File an original, issued Writ of Execution with the Sheriff’s Department along with additional copies. Each county Sheriff will have their own specific forms and requirements. The Sheriff will be executing the levy including towing, storing and selling the car via public auction.
5. File Sheriff’s Instructions.
6. At the public auction, if you decide to bid on the car, you will need certified funds to cover the “minimum bid.” However, as the Judgment creditor, you can “credit bid” over the minimum bid up to your Judgment amount.

Contact [email protected] or 213-624-1515 to discuss the specifics in your case.