Post-Judgment Collection Options - Abstracts of Judgment and Judgment Liens
One effective tool a trust fund or union can use to collect money on a judgment is to obtain a judgment lien against a defendant’s property. In California, a judgment lien can be attached to the defendant's real estate -- meaning a house, condo, land, or similar kind of property interest -- or to the defendant’s personal property -- things like jewelry, art, antiques, and other valuables. The judgment lien on a defendant’s real property is created by recording an abstract of judgment in each county where the defendant own real estate, while the lien against personal property is created by filing a Notice of Judgment Lien with the California Secretary of State. An abstract of judgment is valid for ten years and the Notice of Judgment Lien is valid for 5 years.
Judgment lien in hand, the trust fund or union, now a secured creditor, may simply wait, all the while interest accruing on the unpaid judgment. If and when the debtor wishes to sell or refinance property subject to the judgment lien, the buyer or the refinancing lender, unwilling to take interests subject to the judgment lien, will typically require that the proceeds of the sale or refinancing be first applied to satisfaction of the judgment (including accrued interest) secured by the judgment lien.
The benefits of a judgment lien were recently demonstrated in a trust fund collection action, where a trust fund had obtained a six-figure judgment against a delinquent employer and its owner. Although the company did not own property and had gone out of business, an abstract of judgment was recorded in the county where the owner owned several pieces of real property. Three years after the abstract of judgment was recorded, the trust funds were able to collect the full amount of the judgment plus interest when the owner sold one piece of property and refinanced another piece of property. For more information on judgment liens and other post-judgment collection options, please contact your trust fund or union attorney.
Author: Ezekiel D. Carder
