When another individual or business owes your business money, you may have to resort to the legal system for help in collecting that money. Unfortunately, some debtors are unwilling to voluntarily begin paying you the money that they owe. If this situation occurs, you may have no choice but to explore your options for taking legal action against the debtor.
One large problem with civil collections actions is the fact that by the time you go through the necessary court process and obtain a judgment against the debtor, neither the person nor the business will have sufficient assets to pay off the judgment. You can spend a great deal of time and money trying to collect your money and still never get paid. There is at least one option, however, for ensuring that assets will be available to satisfy your judgment. A writ of attachment, which is a provisional court remedy designed to secure assets at the beginning of a case in order to eventually satisfy the judgment that likely will result; in essence, a writ of attachment places a lien on the property in question. In order to obtain a writ of attachment, you must prove that you have a right to attach the debtor’s assets, whether they are real or personal items of property, and that your claim likely will be successful. Some of the debtor’s property, however, may be exempt under California law.
The first step for obtaining a prejudgment writ of attachment is to apply to the court for a right-to-attach order and a writ of attachment. There are two different ways to get a court to issue a right-to-attach order. The most commonly used way to obtain a right-to-attach order is the noticed hearing method. If you choose to use this method, you serve the notice of hearing and application for a writ of attachment on the debtor at least 16 days before the date set for the hearing. A debtor has the right to file a notice of opposition to your application; if a debtor chooses to file this notice, he or she must do so at least five days before the hearing.
An alternate way to proceed in this situation is to make an ex parte application for either the right-to-attach order or a temporary protective order. Ex parte means that you can obtain an order from the court without waiting the 16 days before a hearing; instead, you only have to give notice to the debtor one court day prior to the hearing. A court will only issue an ex parte right-to-attach order if you can show that you will suffer irreparable injury if you must wait for a noticed hearing.
As you can see, prejudgment attachments are one way to collect money that is owed to you, but it can be difficult for a business owner to handle on his or her own. It is always best that you consult with an experienced California business attorney in order to ensure that you are using the correct procedures for filing prejudgment attachments and exploring all of your options for collecting the funds that another owes you. At Heit Law Group, P.C., we offer general counsel services for many California businesses, including dealing with collections issues. Our California business lawyers know how what you need to ensure that your business complies with all state laws relating to your business transactions. Call our office today to set up your complimentary evaluation.