• Playing Cards: Pull Up a Chair and Sit Down
  • May 9, 2014 | Author: David J. Cook
  • Law Firm: Cook Collection Attorneys, PLC - San Francisco Office
  • First in a Series

    Hey You! Yeah, You. Don’t walk away, Mister. I am talking to you. What are you doing wandering through this casino with a drink in your hand and nothing to do? Come on, take a seat at the card table and let’s play cards.

    What cards, you’d say? Cards to collect a judgment. What did you think? Is the debtor is going hand you the money willy-nilly? No way, you are going to play a few rounds.

    Collecting a judgment is a game of chance, mind you. You got to work for the money and play cards to earn your keep. You’ll never know what the next hand will look like in this game.

    Have fun. We can chat when you are done, assuming that you are still here.
    Come on, pull a chair and sit down. Who is the dealer? Nice uniform. A little boring. It’s a robe. That’s right, a judge’ robe because the folks wearing the black muumuu are dealing you the cards that you can play when collecting the judgment. Check the footwear and headgear. If the dealer is wearing Birkenstocks, and the headgear is a red bandana, you might be in a long evening.

    Who else sits at the table? No, you are not alone, and forget the scary movies. The fellow on your right is the debtor, playing on borrowed money. Of course, he is working on credit. What did you think? What about the lady on your left? Comes to the table with briefcase in hand, and business cards at the ready, and hails from your competitor. That’s right, another collection attorney holding a large dollar judgment and big bucks to run down the debtor. Who else sits on the table? The folks from the state taxing authority, the IRS, and ex spouse owed unpaid spousal and child support. There is a pot, but everyone is playing for the pot which might to the winner if dealt the straight flush. Busy table. Be alert.

    We are going to play cards. Some hands are great and you might hit the jackpot, or you might bet the ranch, go bust or fold. Who knows? You play the cards you have been dealt.

    Drinks anyone?

    What Do the Cards Tell You?

    The successful plaintiff who wins at trial becomes a judgment creditor. Other than family law judgments, such as spousal and child support, a judgment does not compel the judgment debtor to pay. Rather, the judgment creditor must enforce the judgment. Other than a moral imperative, the judgment debtor can literally “take a hike.” Responsible members of the community, governmental entities, major corporations, nonprofits, and in fact most members of the commercial community will pay a judgment, or at least readily engage the judgment creditor to settle, discount, or structure a payment program. More than once in a while, the judgment debtor refuses to pay, cannot pay, or has other more pressing obligations such as a home mortgage. Why a debtor declines to pay is a mystery. Getting the uncooperative debtor to pay require skill, money, diligence and fair amount of luck, and hence the title to this series.

    This presentation is educational not legal advice. As in all legal matters, a litigant, or simply a claimant, is always encouraged to retain the services of a competent lawyer as to his/her rights or remedies. This series discusses broad legal issues whose application is subject to many exceptions, interpretations, changes, and in which an outcome may be fact-determinative and usually unpredictable.

    This series is not a substitute for legal advice, and anybody facing a legal issue should retain the services of a competent lawyer whose advice may differ with or vary from the statements and opinions discussed here.

    The rendition of a judgment also means that the judgment creditor could on his or her own enforce the judgment. Alternatively, the judgment creditor can hire an attorney, a collection agency, or even a third party to collect. The key issues in the retention of a professional are as follows: Whether hourly or contingency; who pays the costs; what can and will be done; should any action be taken as opposed to no action and letting the debtor pay the judgment when the real property is sold. Collecting a judgment is expensive. Sheriff, process servers, court filings fees can mount up fast. High end enforcements require an endless capital.

    Judgments typically have a 10-year life and must be renewed timely. Otherwise, the judgment will expire. A judgment is renewed by filing an application for renewal or filing suit on the judgment. The law of expiration of judgments has many exceptions and certain cases provide that a judgment may be renewed by the filing of suit, even though 10 years have passed. The parameters of renewals are outside the scope of this series, and therefore, if confronting this issue, rigorous legal research and investigation into the facts is absolutely required.

    This series includes all civil judgments, but does not include family law judgments which have different rights and remedies. Family law collection matters may involve enforcement remedies through the District Attorney’s Office, along with the prospect that the debtor, if a lawyer, may have his or her law license suspended. This series applies generally to California judgments and judgments rendered in other states, but domesticated here in California. Other than discovery and the services of the U.S. Marshal, this series likewise applies to judgments in the district courts (US Courts). The primary difference about US courts (district or bankruptcy court) is that the judgment creditor is entitled to a greater range of discovery. The judgment creditor would enforce the judgment through the US Marshal, who does not necessarily field the same range of services as the Sheriff. Judgments in state court accrue interest at 10%, while judgments in the district court, including bankruptcy, accrue interest at less than 1%.

    This series discusses enforcement of a judgment without a further analysis as to whether the debt is commercial or consumer. Certain consumer debtors, even through enforcement, are subject to the protections of the state and federal Fair Debt Collection Acts which compels very different rules. These are more than just “rules,” but a substantive body of laws that control the enforcement of a debt subject to the protection of these Acts. Violations of these Acts can subject the attorney or collection agency to damages and attorney’s fees. Attorney’s fees drive FDCPA actions. “Shocked, shocked,” is the cry of the FDCPA plaintiff who receives a demand letter bearing a return address identifying the sender as a collection agency.

    Scope of Series

    This series does not discuss prejudgment remedies, such as an attachment, claim and delivery and injunctive relief. This series presumes that a judgment has been entered and free of any defects or collateral attack. This series does not discuss any rights of defense to the judgment, such as a void or voidable judgment, or the right of the judgment debtor to vacate the judgment based upon excusable neglect, inadvertence or surprise, or other equitable grounds. However, in the event of enforcement a judgment debtor may retain counsel to inspect the file to ascertain whether a jurisdictional defect might exist entitling the judgment debtor to vacate the judgment. Alternatively, within the six months after the date of the default, the debtor can move the court to vacate the judgment based upon the grounds as stated above, i.e., excusable neglect. This discussion is relevant in this series as a judgment creditor might choose to refrain from any enforcement for six months on the basis that the debtor’s rights for a discretionary relief from the judgment would expire. The contra-argument to the six-month delay in enforcement is that the debtor’s assets may be dissipated, gone, transferred, or encumbered by competing creditors. Facing the $1 million lawsuit would drive Gandhi to open a Swiss bank account.

    Any misstatement as to the gender of the person in this series is incidental.

    From the beginning, enforcement of judgments is expensive in that the court (state) charges for the issuance of process, such as writs, abstracts, motions and debtor’s examinations. The Sheriff likewise charges for its services. This list of charges is online. Charges and fees for enforcement counsel and collection agencies are separate and the subject of a business negotiation, but in most, but not all cases, counsel and agencies charge a contingency fee between 15% to 40%. Practioners can be found through many organizations, including the Commercial Law League of America (CLLA.org). Lawyers.Com, among other sites, can direct a judgment creditor to a collection attorney. Collection agencies likewise maintain many associations.