Notice Of Levy

August 12, 2023


A “Notice of Levy” procedure can be used for final money judgments, and also for cases where a judgment (or settlement) has not been reached yet.

One of many judgment articles: I am a Judgment Broker, not a lawyer, and this article is my opinion based on my experience in California, please consult with a lawyer if you need legal advice.

If you are going to try to levy your debtor’s property soon (or put a claim on the property for a proper reason, or perhaps just to get the other party to take you seriously – see end of this article), a “Notice of Levy” procedure is probably the best way to start. What to do next depends partly on if there is any opposition filed by a relevant party. A notice of levy is generally defensible, even if it is not the most direct way to get paid.

In Federal court, one can file a notice of a lien via PACER.

To object to your notice of levy requires a noticed motion, not just a choice by the judgment debtor, see CCP (California Code of Civil Procedure) 701.520(c) and (d):

CCP 701.520(c): Within 10 days after service of the notice of intended sale, the judgment debtor may apply to the court on noticed motion for an order that the property be collected rather than sold. A judgment debtor who so applies shall, within the time allowed for the application, serve a copy of the notice of motion on the judgment creditor and file a copy of the notice of motion with the levying officer. Service of the copy of the notice of motion on the judgment creditor shall be made personally or by mail. If the copy of the notice of motion is not filed with the levying officer within the time allowed, the levying officer shall proceed to sell the property. If a copy of the notice of motion is filed with the levying officer within the time allowed, the levying officer shall continue to collect the property until otherwise ordered by the court.

CCP 701.520(d): At the hearing on the motion, the court may in its discretion order that the property be sold or be collected depending on the equities and circumstances of the particular case.

If the court orders that the debtor’s property be sold, their order may specify the terms and conditions of the sale. If the court orders that the property be collected; the court may condition its order on an assignment of property belonging to the judgment debtor, to the judgment creditor pursuant to CCPs 708.510-708.560.

CCP 708.410(d) clearly describes when a Notice of Lien in a Pending Action may be filed. Of course, after the judgment becomes final; a levy usually offers the best chance to be paid. CCP 700.190 clarifies the distinction of a final money judgment. These two CCP sections, by their language, seem mutually exclusive.

There is a theory (based on California CCP 701.520) that some in the judgment business have kicked around, that your judgment debtor may object to your levy, and then the Sheriff is somehow required to collect the judgment, rather than sell it at an execution auction sale. However, this is just a theory.

The reason it is a theory is, to collect the judgment the debtor would need to give the Sheriff sufficient information to allow the Sheriff to collect on the judgment, such as bank information, etc. The Sheriff cannot compel the judgment debtor to pay on demand. Usually, one is only in a position to issue or compel an acknowledgement of satisfaction if they have properly obtained the rights to the judgment pursuant to state laws.

If the debtor objects to a Sheriff levy, they will not likely prevail on using CCP 701.520 to cancel the sale. This is unlikely because the debtor will:

1) Take the steps required to object to the Sheriff auction, and

2) Prevail at the hearing on their noticed motion.

I have never seen or heard of such a motion being brought. It could happen because it is authorized under the law. This is no reason to write off the recovery process, or not considering a levy on your debtor’s money judgment or property.

In opposition to any such debtor motion, the creditor might argue that without a showing by the judgment debtor, and that there is some likelihood of realizing collection through the levying officer, the motion should be denied.

So, there exists a potential problem with a levy with an auction sale. If the judgment debtor simply objects to the sale (not even a court procedure), then the Sheriff must collect the judgment, not sell it. What are the odds that the Sheriff, faced with such an objection, is going to make any effort whatsoever to collect the judgment between now and a hundred years from now?

If the judgment debtor elects to have the Sheriff collect the judgment, that is the end of any efforts the judgment owner or the assignee might make to enforce it.

The creditor receives any funds that the Sheriff collects, however if the Sheriff collects nothing, that is what the creditor gets.

It is best to ask the Sheriff to sell the judgment or property, if you think your judgment debtor will not fuss. Some judgment debtors hire attorneys to challenge their creditors.

What is done is done. There is nothing in the statutes or case law to suggest that an unopposed “Notice of Lien” is ineffective, regardless of when it is filed. Is filing a notice of lien the best way to do business? Probably not, but it is not prohibited. What is not prohibited, is permitted. (At least, until a judge says that it is not permitted.)

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