Liens And DBAs

Many judgment creditors contact me and claim they have a rock-solid judgment worth a ton of money cash up-front; as they have a judgment against some business and have already recorded a judgment lien against that company, and while that company is out of business/doing poorly, the guy owning the company is rich, so "all you need to do to collect is to go after the person to make them pay the judgment".

The big show stopper is, when a business is a corporation, it most often shields all business owners from paying any of that company's debts. When the company was named slightly differently than was listed on that judgment, it can be relatively simple to amend the judgment to correct their name, if there are no new parties added.

If the judgment owner didn't sue a person, there is only one way to try and include an individual to that judgment is to attempt to prove some kind of fraud with a new lawsuit. There are three problems with this idea; it's really expensive, there's no guarantee it will be successful, and it will not do any good if there's insufficient assets. People who buy judgments pay almost no cash up-front for judgment situations like this.

My articles are my opinions and are not, a legal opinion. I'm the judgment broker, and not an attorney. If you need legal advice or a strategy to use, you should contact a lawyer.

A few other judgment owners tell me that they own a judgment against some DBA (Doing Business As) business and recorded a judgment lien against the DBA company, "So their lien also is against that business owner's condo". The show-stopper is, a lien only attaches to the exact name(s) listed on the judgment which enables the lien.

Fictitious Business Names (FBNs) also known as DBAs, are alternative names for person(s) and isn't a separate legal entity. A judgment just against a DBA name alone, needs to be modified by the court for any chance for the judgment to be enforced, and a lien recorded against just a DBA almost always has no power.

Even though a FBN/DBA is not a separate legal entity, it can be seen as a distinct entity. This means in most states, a bank account in the name of the FBN may be garnished when the judgment owner provides a declaration and proof of who is the owner of DBA. In California, as per CCP 700.160, an individual(s) bank account kept in the name of a DBA may be levied by supplying and providing a non-expired FBN document that has been certified.

If the judgment debtor is just against a sole proprietorship's DBA business name and a lien is recorded in that named DBA, that lien will not attach to any real property owned by the owner of the business. For a chance to enforce a judgment against any kind of property, both the judgment and any liens, needs to list the same names as the registered owner of the property.

The title companies aren't required to look at all possible name variations or business FBN names of any real estate property owners. It's the duty of the judgment owner to make sure their judgment lien will attach. A lien having a name of Dan Debtor will most likely never reach property owned by the name of Dave D. Debtorman, II. One way to go is to get your judgment amended to include the correct name of the business owner. In California, that is very often done using an affidavit of identity.

Then you could file a brand new lien updated with the information on your amended judgment, although that would mean that the new lien will lose any lien priority that it had before. A better idea is to file an amended lien (in California, see CCP 674), as that preserves the lien's original recording date priority. The amended abstract/lien will retain it's original filing date for the priority of the lien when it is properly filled out by (e.g.) putting a check in the right box on the form, and listing the original lien filing number.

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