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Credit Bidding

By Mark Shapiro

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Published: 03Feb2012
Word count: 810
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I am not an attorney, I am a Judgment 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.

One method that judgments may be enforced is using the judgment to credit bid. In some auction circumstances, you may be allowed to credit bid for property belonging to a debtor.

Credit bids are chances for all or some of a judgment or secured claim against an entity or person, to get swapped for the assets of the debtor, when and if their assets are listed for auction sale.

At the auction sale, one might be allowed to attend an auction and rather than of bidding using cash, one can place a bid using credit from their secured claim, or from your judgment.

One situation where one might be allowed to bid with credit, is when one had the Sheriff seize and auction a judgment debtor's property. At the auction, one could use the total due on the judgment, to pay most of the costs of winning the property at the auction.

Getting debtor property by credit bidding for it (as an example, a real estate or a vehicle), only happens at a (Sheriff or bankruptcy court) auction for the property, for creditors with a secured interest in the property.

Check that bidding with credit is permitted, with the local Sheriff and court. In certain situations and places, one will not be able to bid with credit. In other locations, to be able to credit bid, there has to be be another entity at the auction, bidding using an equivalent to cash or cash.

A credit bidder has a huge auction advantage, as most bidders who bid need to be willing to quickly present the auctioneer with cash or the equivalent, for instance a cashier's check.

A credit bid is not cash. In California, credit bidding at Sheriff auctions is covered by CCPs 701.560 and 701.590. In California, one usually needs to place a deposit of cash, to be allowed to credit bid at the Sheriff's auction.

In many auctions situations, one has to spend a bunch of cash, in addition to what one may credit bid. One example is the cost of a debtor's exemption claim. One may not credit bid for the total of that exemption, which by law has to be paid to the debtor.

Most often, the starting bid price is what is owed for loans on the property, and a debtor's exemption. When there are no auction bidders, what happens after that depends on the details. Sometimes, the debtor's property is returned.

I have heard from attorneys friends, that attorneys, when bidding with credit for their clients, don't need to pay any cash upfront.

I know a judgment recovery specialist, that paid the Sheriff to levy a debtor's vehicle that he wanted. At the auction, he paid the other bidders $600 each to walk away, so he was the only winning bidder on the vehicle for a great price.

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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