Bank levies are the first things to try, when you want to attempt to recover your judgment. This being the case, the first information to try to discover is where your judgment debtor banks. Most judgment debtors do not maintain bank safe deposit boxes (or Safety Deposit Boxes – SDBs), however some do. All bank levies require a writ of execution from the court. My articles are my opinions, and not legal advice. I am a judgment broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.
Even when you know that your judgment debtor has a bank safe deposit box (SDB), those are more expensive to levy than a regular bank account. Levy instructions should request funds from the judgment debtor’s checking and bank accounts first; and then to check for any safe deposit boxes in the name of your judgment debtor. At that point, there is a decision to make, whether to gamble on the value of the contents of what is inside their SDB. If you can afford to risk the extra costs of having the Sheriff levy the judgment debtors SDB, it may be worth specifically requesting the SDB contents on your levy, when it gets served on the judgment debtor’s bank.
Things to ask the the debtor’s bank before a SDB levy attempt include:
1) When the debtor’s box agreement was started/signed
and
2) When was the last time it was accessed by the judgment debtor. (They have to sign in.) Some safe deposit boxes are promotional offers the bank offer that the debtor never uses.
Just as some judgment creditors are not aware that the contents of a judgment debtor’s safe deposit box can be levied, many judgment debtors think that the contents of their bank SDB is protected from creditor levies. Judgment debtors may think they can hide some assets in a SDB, and no one will ever know. They might keep a wide variety of assets such as cash, collectibles, documents about notes receivable, jewelry, etc. That misunderstanding by judgment debtors, can be good news for judgment creditors. Those valuables can be subject to a judgment creditor’s bank levy execution.
Note, there may be exemptions in your State for items such as jewelry; in California CCP 704.040 gives debtors a $6,075 exemption. If there is likely to be jewelry or rare coins involved, you might want to pay to have an appraiser there. Of course, the value of the items depend only on the price they actually sell for at the Sheriff’s auction. You might want to take pictures of each item so you can list them at the Sheriff’s auction sale.
To levy a judgment debtor’s safe deposit box at their bank, you need to make a request that the bank and Sheriff check for the existence a SDB, and possibly freeze the contents of their SDB, on the levy or execution forms you file must at the court, or with the proper authority. Once the Sheriff, or other proper court representative; serves the papers on the correct bank, the contents of the judgment debtor’s SDB, is subject to being used for payment toward satisfaction of your judgment. Most contents of a SDB levy (except for cash) must be sold at a Sheriff auction sale.
For a levy that includes a check for safe deposit boxes, instruction letters to Sheriff’s should say something similar to: “please have the Sheriff levy all funds under the name of Dan Debtor SSN 123-456-7890 at So and So Bank, 123 Rich Street, San Jose, CA, 90001, for the judgment debtor. Please levy first, any and all savings and deposit accounts, and then if the writ of execution is not fully satisfied, check for any and all safe deposit boxes in the name of the judgment debtor”.
From the time your levy is served, to when you get paid could take many months. Usually, whatever assets are in debtor safety deposit boxes are sold at a Sheriff auction. A good idea, is to have a qualified appraiser (for coin and jewels) in attendance at the opening so a careful inventory can be taken. You can credit bid (using what is owed for your judgment to bid and pay for things at a Sheriff’s auction to for anything the sheriff sells at auction, up to the debtor exemption amounts; remember the unusually high jewelry exemptions.
In California, CCP 700.150 specifies the details on how safe deposit boxes are levied, and how judgment debtors are served notice. Government Code Section 26723 is referenced, which simply specifies a fee of $125 (might be more now) is required to open a SDB. The judgment debtor may be allowed to open their SDB voluntarily, and some do. Otherwise, the creditor must pay for forcing open (drilling) and then repairing the SDB. Most of the time, this additional levy expense can be documented and then added to the judgment debtor’s debt.
Make sure your instructions ask for the debtor’s box to be frozen. Bank of America, and perhaps some other banks, are known for letting the debtors know a levy is in the works, and lets them empty their boxes – shame on those banks. After a levy, some debtors will claim there are vital paperwork items they must receive, in an attempt to remove valuable stuff before the box is opened by the Sheriff. Most banks will not allow this, and will tell the debtor they can get their papers when the Sheriff is there.
What will happen if your levy finds a judgment debtor’s safe deposit box? If your Sheriff levy instructions specify that you will pay (or prepay) the extra costs of levying a judgment debtor’s bank safe deposit box, their SDB will be opened. Sometimes the key to open the SDB will appear, which usually saves the creditor money. All too often, hiring a locksmith is required to force the safe deposit box open. Even if the bank has one key, it usually takes 2 keys to open safe deposit box.
When the bank’s levy department responds with its “Memorandum of Garnishee”, it will indicate the presence of any SDBs held in the name of your judgment debtor. At that time, the Sheriff will send you a letter and give you (e.g.) five days to let them know you want the box(es) opened by drilling (break into the box). If you do, you will have to pay the Sheriff some money (e.g., $150-$800 per visit) and usually, the bank even more money (e.g., $300 per box) to drill the box(es).
The bank will offer the judgment debtor a chance to visit the bank and open their box voluntarily (however not to remove any contents). If the judgment debtor does not accept the bank’s kind offer, their safe deposit boxholder privileges will be forfeited and the drilling takes place on the appointed day. Some Sheriffs require the judgment creditor to be present on this festive occasion, others do not.
Occasionally the judgment debtor or a third-party, will claim some or all of what is in the safe deposit box does not belong to the judgment debtor. In that case, the non-debtor co-owner would have to come forward and file a third-party claim of exemption with the Sheriff, indicating the source of the funds or assets. If you suspect shenanigans, you may be able to subpoena records related to the ownership of the contents of the safe deposit box.
Will the expense of levying your judgment debtor’s SDB contents be worth the cost? Anything can happen. You might ask the bank how long ago the box was ordered and opened. The bank is required to keep records. If it has been a long time and the judgment debtor has not accessed it, it will probably be empty. Their box could be empty, or it could have rare coins, stolen property, drugs, or a thick stack of $100 bills, or most anything else that will fit. Hopefully, you will find a treasure waiting to satisfy your judgment. The judgment debtor can be in attendance, along with anyone else who has something in their SDB. It is usually fun to watch the judgment debtor’s face when their (formerly private) safe deposit box gets opened.