The Downside Risk Of Levying A Vehicle

I am not a lawyer, I am a Judgment Broker. This article is my opinion, from my experience in California, and laws are different in every state. If you ever want a strategy to use or legal advice, you should contact a lawyer.

A classic method to recover judgments is paying a Sheriff to garnish a judgment debtor's vehicle, which might be a car, truck, motorcycle, etc.

Levying a debtor's vehicle could get risky and difficult for a few reasons:

1) It requires a lot of money to have a Sheriff seize and sell a debtor's vehicle. If you don't have thousands of dollars to gamble, it is best not to attempt this.

2) A sale might not make any sense. The judgment debtor's vehicle might not have enough equity in it because of previous leases or loans.

Other considerations and expenses are the imperfect market (a forced sale) at Sheriff auction sales, State exemptions, and the costs involved having to pay the Sheriff to tow, place in storage, and sell at auction, the debtor's vehicle.

Especially when you don't estimate all the factors first, you could certainly lose money trying to garnish a debtor's vehicle.

3) The Sheriff usually will not search for concealed vehicles, and will not pick locks or break into a locked area, unless they have a new court order instructing them to do so.

You have to explain the vehicle to the Sheriff in detail, exactly where it is parked, and the license plate number. The Sheriff, usually will make just a few attempts to levy the vehicle for the initial fee.

4) One cannot legally threaten anyone. Because of laws, especially in California, usually you should avoid communicating to a judgment debtor that one plans to pay a Sheriff to levy their vehicle.

In California, the best legal way for a judgment owner to pay the Sheriff to levy the debtor's vehicle, is by surprise.

Losing a vehicle can cause a big reaction with the debtor. In the best case, that reaction might be to pay the Sheriff or you to stop the levy.

There is also a chance their reaction might be irrational. Most debtors count on their vehicles for transportation to go shopping, or to work, or to take children to school.

Before you attempt to garnish a judgment debtor's vehicle, try a wage or bank levy first.

After you do your homework, you might decide to pay for a writ, and then pay the Sheriff to levy the judgment debtor's vehicle. The debtor might respond by filing a claim of exemption.

If the judgment debtor files for bankruptcy protection, the money you spent will likely be wasted.

One may hear from the debtor, after they attempt to file a vehicle theft report, and find out what happened, or if they see the Sheriff towing their vehicle.

Sometimes a judgment debtor will contact you, to make arrangements to get their vehicle back ASAP, and that could be the best opportunity to make a deal. Remember, whatever you paid the Sheriff and the court, is gone.

For every 3 debtors that saythey'll file for bankruptcy protection, usually 1 really does. Listen to them, then return to your office and check on PACER.

If the Sheriff auction goes through, be sure to contact the Sheriff's office to learn what is required. In California, the Sheriff usually sends one the notice of the sale auction, with the cost of the opening bid.

Show up at the auction, to protect your position. If you are not there, someone might purchase the vehicle at the opening bid price. If this happens, you would get nothing toward your judgment - and you'll lose what you paid for storage fees.

In California, one attends the auction with certified funds (see CCP 701.590), for a minimum opening bid, which is the amount of the liens, plus the debtor's exemption.

One may credit bid for anything above the opening bid (which can include the debtor's claimed exemption), to help keep the bidding price up, up to the amount itemized on the writ of execution for the judgment.

Unlike EBay, fierce bidding is very rare at Sheriff auctions. Usually, there are only a few bidders at each sale.

Sheriff's sales are not well-advertised. The law only requires the Sheriff to place a flyer in a public place, for example a post office or a grocery store. One could do their own advertising to try to attract more bidders.

When you aren't the high bidder, the Sheriff does the math, takes their cut, deducts expenses, and will eventually send you a check.

When you are the winning bidder, you may sell the vehicle or keep it. If you sell it, you must spend more, to make the vehicle ready to sell.

If you are the assignee of record, you have to choose if you'll split any potential profit with the original judgment creditor.

Many enforcers don't split any vehicle levy profits, as they don't get to split any expenses of a vehicle levy, or the risks of losing all the money they spent; with the original judgment creditor.

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