I am not a lawyer, I am a judgment broker. This article is my opinion, and not legal advice, based on my experience in California, and laws vary in each state. If you ever need any legal advice or a strategy to use, please contact a lawyer.
This article summarizes and comments on the most common California civil laws concerning assignment orders.
The text of the California laws mentioned in this article have not been included, because they are lengthy and can be found with a web search. It is very important to know the laws for your state.
California has two sets of civil laws – one set covers the general rights and obligations, for the people and entities in California, and they are called the California Civil Codes.
The other set of California civil laws are the California Codes Of Civil Procedures (CCP), that cover details about courts, procedures, and the implementation of the civil laws in California.
These are the California laws that directly address assignment orders:
CCP 708.510 – This is the most important law about assignment orders, it lists the types of incomes that can be reached, and what must be included in assignment orders. This law says the judgment debtor can be served by mail.
This law does not specify how third-parties that owe the judgment debtor may be served. One option is to have all parties served personally. That way, if a party does not comply, you can ask the court to issue contempt of court penalties, or you might be able to start a lawsuit against them.
Also, the road to a contempt ruling is a game of degrees measured in several milestones along the way. You need to build a strong case for contempt over time if you have any hopes of prevailing. Your first big hurdle is to prove that the person alleged to be in contempt had actual notice of a court order, that the court order clearly directed the person to do or refrain them from doing something, that is was within the power of that person to comply with the court order, and that they willfully disobeyed the court order. Civil contempt is a quasi-criminal proceeding, subject to a higher burden of proof than in ordinary civil proceedings (beyond a reasonable doubt versus a preponderance of evidence). In small claims court, judges may not be interested in contempt, and Pro Tems and commissioners almost certainly will not be interested in deciding a contempt ruling.
To save money, perhaps have the parties served by mail first. When the parties (you hope will be sending the monies) are served, without giving legal advice, politely make sure they understand what the order says. If they do not respond, politely contact them, then have them personally served if necessary.
CCP 708.520 – This law covers optional restraining orders that must be personally served on the judgment debtor, warning them not to play any shenanigans, and to obey the court’s order.
CCP 708.530 – This law refers one to Civil Code 955.1, which covers topics such as the details and priorities of payments. 708.530 also states that assignment orders may be recorded as a lien.
CCP 708.540 – This law is common sense, the entity paying your debtor is not obligated to pay you, until after they are served notice of the assignment order.
CCP 708.550 – This law explains how a judgment debtor could claim that the income stream being assigned is exempt, which means the creditor will be served for another hearing to decide the matter.
CCP 708.560 – This law allows assignment orders to be amended or canceled by either party, and requires service on the other party, and another court hearing, which can be ex-parte, following the guidelines of CRC 3.1200.
These are some of the other California laws that affect assignment orders:
CCPs 706.010 and 706.011 – These are the wage garnishment laws, that regulate how earnings may be levied to pay a judgment debt, and has legal definitions of the involved parties.
While one could claim that assignment orders do not have to follow CCPs 706.010 and 706.011, most judges prefer to approve orders that comply with the spirit of CCPs 706.010 and 706.011.
CCP 708.610 – This law allows a receiver to be appointed if necessary.
California Civil Code Section 955.1 – This law defines how levies and third-parties have to follow commercial codes. Also, how third-parties must respond, and how third-parties cannot easily avoid paying what is owed to the judgment debtor, unless they are involved with a public utility, which is rare.
Should you send a notice to the judgment debtor? Most do because of law 954(c):
(c) The filing of an acknowledgment of assignment of the judgment with the court under Section 673 of the Code of Civil Procedure is not, of itself, notice to the judgment debtor so as to invalidate any payments made by the judgment debtor that would otherwise be applied to the satisfaction of the judgment.
Notice to the debtor of an assignment is not necessary to render the assignment binding between the assignor and the assignee. However, a debtor is not bound by the transaction until he/she receives notice of the assignment. Thus, in order to charge the debtor with the duty of payment to the assignee, a debtor shall be provided with sufficient notice of assignment and if the debtor pays the assignor or the assignor’s judgment creditor before receiving the notice, the debtor shall be discharged from liability.