Turning A Civil Judgement Into Cash With A Personal Property Execution
By: Washington State Civil Litigation Lawyer William O. Kessler
After a party obtains a civil judgment in a lawsuit, his lawyer often advises him to conduct “supplemental proceedings.” This is a process in which the judgment debtor appears in court and answers the lawyer’s questions about the nature and whereabouts of the debtor’s assets.
There are often problems with supplemental proceedings, including: (a) the debtor has notice of the hearing, giving him time to hide his assets either before or after the hearing; (b) the debtor often lies about the location and nature his assets; and (c) at the end of the day, the judgment creditor puts no cash in his pocket- instead, he is out even more money: the legal fees he paid his lawyer to conduct the supplemental proceedings.
Here is a story illustrating the advantages of an alternative, known as the “personal property execution:” My client, Lender, loaned Debtor-contractor $35,000 in exchange for an unsecured promissory note. Debtor failed to pay Lender when the note came due, simply ignoring Lender’s payment demands. Lender sued and obtained a judgment which included all Lender’s attorney fees and interest. Debtor lived in a large new house in an upscale development. Not surprisingly, the house was mortgaged to the hilt, meaning we could not sell it to satisfy the judgment. We did not know where Debtor banked, so we could not garnish his bank account. Debtor was a self-employed contractor, so we could not garnish his wages.
Rather than drag Debtor into court and ask him questions about his assets, I utilized a judgment collection process known as Execution on Personal Property. This means I:
1. Scheduled a time with the Sheriff to accompany me to Debtor’s home.
2. At 7:00 am, arrived with (a) a Sheriff’s deputy, (b) three city police officers recruited by the deputy, (c) a moving truck, (d) two movers and (e) a tow truck.
3. Stood with Debtor in his driveway and informed him the Sheriff would seize all his personal property and sell it, unless we could work out a deal then and there. In the meantime, the moving truck and tow truck idled on the street and the police blocked the driveway so the Debtor could not drive away.
This put Debtor in the position of negotiating for the buy-back of his family’s personal belongings, including vehicles, jewelry, electronics, etc. A good way to find out whether a debtor actually has access to cash is to give him the option of either (a) accessing that cash to immediately pay a negotiated amount, or (b) go through the expense, inconvenience and embarrassment of having everything removed from his house except beds and clothes.
In this case, Debtor negotiated to wire my firm $25,000 in exchange for everyone leaving his house with his property in it. Under the settlement arrangement, the only property we took was his wife’s large diamond earrings. When Debtor paid the rest of the judgment a week later, the Sheriff returned the earrings.
What if the Debtor is not home or will not negotiate? A debtor’s personal property, if actually seized and sold, may fetch enough funds at the sheriff’s sale to offset the costs of the execution process, but probably not much else. However, there is still likely advantage in searching the debtor’s home: You will likely find financial information in the home, including real estate, banking and brokerage records. This is far better information than the lies you will likely be told in supplemental proceedings. In fact, if you find banking records, the deputy will often direct an officer to (a) drive straight to the nearest branch with the Writ of Execution and (b) order the branch manager to empty the bank account.
In short, the personal property execution often gives you the highest likelihood of turning your judgment into cash.
If you would like help turning a civil judgement into cash with a personal property execution, please contact one of the Washington State Civil Litigation Lawyers at Beresford Booth PLLC.
Beresford Booth PLLC – Edmonds Washington Lawyers (425.776.4100), www.beresfordlaw.com
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