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Third Party Levies

By Mark Shapiro

Republish: EasyPublish™
Published: 29Jan2012
Word count: 1240
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I am not an attorney, I am a Judgment and Collections Broker. This article is my opinion, from my California experiences, and laws are different in every state. If you ever want a strategy to use or legal advice, please contact an attorney.

Usually, the only method of recovering a judgment is with the Sheriffs (or levying officers), courts, and often registered process servers; selling and/or levying a debtor's assets.

Often debtors have assets with 3rd parties, when a debtor owes your debtor. 3rd-party levies may often reach debtor assets controlled or possessed by 3rd parties.

The start of a 3rd-party levy is determining who pays your debtor, or possesses assets that belong to the debtor. The following step is to determine the right plan to attempt to levy the debtor's assets.

If the debtor is self-employed, or gets paid from trusts, royalties, or distributions; assignment orders may be required. Assignment orders can be fairly complicated, and must have a court hearing.

Levies are often fairly easy as they don't need a court hearing.

When in California, one buys a writ of execution, then fills in a few judicial council forms, then delivers a check and a letter of instruction to the Sheriff, and sometimes a registered process server. Then, the levy gets served on the 3rd-party entity or person that could some day be paying your debtor.

If the debtor works and receives income, or have bank accounts, these assets can be attached with typical types of 3rd-party levies.

A bank account levy is a one-time levy of the debtor's funds. A wage levy is a continuous levy of a portion of the debtor's wages. Most 3rd-party levies are one-time levies, however they don't have to be.

Most kinds of assets and money retained by 3rd parties which belong to a debtor, may be garnished As an example, payments to independent contractors, commissions, rents, tips, and bonuses.

It's also possible to pay the Sheriff garnish uncommon assets. For example vehicles at the repair shop, and animals in boarding kennels, if you pay for and arrange proper handling, and storage of the assets. Everything relies on cooperation from a local Sheriff.

If the debtor owns a property, and tenants send them payments, a 3rd-party levy may be used to levy rent payments, but this relies on assistance from, and proper instructions to, the local Sheriff.

A (3rd Party Levy/Rent Levy) gets served on one or more renters. The Sheriff may collect the rent directly from the renter(s) as a credit toward satisfying the judgment. Be sure you don't request the Sheriff to over-collect, as legally one may recovery only what is owed.

If a Sheriff agrees, a 3rd-party levy may last as long as is needed. Some Sheriffs will continue to collect rent payments as long as they have a valid writ of execution in their file and money is owed.

A renter may not get evicted for failing to provide the manager/landlord with the monthly rent when a Sheriff or a court orders that the renter sends the rent to the sheriff or you, rather than to the landlord.

After one gets a 3rd-party levy served, the 3rd-party might assert the assets belongs to them, not the debtor. Or, another 3rd-party to the debtor's 3rd-party, could claim the assets belong to them. (See CCPs 720.230 and 720.130.)

When a 3rd-party files a claim with the Sheriff, the Sheriff halts the levy, and gives the judgment creditor an opportunity to quickly post a bond, or pay cash (file an undertaking) with the court or the Sheriff, for the value of the (now disputed) claim.

When the judgment creditor doesn't provide a bond or cash, and doesn't have a valid restraining order, the Sheriff releases the assets back to the party who filed the claim. If the judgment creditor can successfully provide an undertaking, the assets already levied on can be delivered, or sold by the Sheriff.

When a 3rd-party claim is entered, and either a judgment creditor's restraining order is in effect, or the judgment creditor provided cash or purchased a bond; the 3rd-party claimant needs to arrange a court hearing quickly.

The 3rd party claimant usually must provide the burden of proof, that the assets is their property. When the judgment creditor claims a fraudulent transfer, then the burden of proof shifts back to the judgment creditor.

At the court hearing, the court decides the validity of the 3rd party claim, and that decision may be appealed. When the 3rd party claim is upheld by the court, the judgment creditor will not get paid.

http://www.JudgmentBuy.com - where Debts and judgments quickly get enforced by an expert - matched for free to your debtor. Mark Shapiro, offering the best no obligation free leads for collection agencies, enforcers, and contingency collection lawyers.

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