How Do I Remove a Judgment Lien in California?

Full question:

A judgment lien is recorded on my property that's in a TRUST but I (or the trust) has nothing to do with the corporation that the attorney obtained a judgment from. My address was used by the incorporation as initial agent of the President of that now-suspended corporation. How can I have this judgment removed from my address?

Answer:

The answer will depend on all the facts and circumstances involved. It may be possible to contact the party who filed the lien (or their attorney) and have them voluntarily agree to release the lien. If not, it may be necessary to petition the court for relief.

Injunctive relief consists of a court order called an injunction, requiring an individual to do or not do a specific action. It must be proven that without the injunction, harm will occur which cannot be remedied by money damages. To issue a preliminary injunction, the courts typically require proof that

(1) the movant has a ‘strong’ likelihood of success on the merits;
(2) the movant would otherwise suffer irreparable injury;
(3) the issuance of a preliminary injunction wouldn't cause substantial harm to others; and
(4) the public interest would be served by issuance of a preliminary injunction.

A request for a declaratory judgment may be filed with the court, seeking to have a judicial declaration of the rights of parties involved. A petition for a declaratory judgment asks the court to define the legal relationship between the parties and their rights with respect to the matter before the court. It is used to determine the legal status of a situation, rather than the enforcement of the rights involved.

A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." If the judgment remains unpaid, the judgment debtor may request that the court place a lien on the judgment debtor's property, such as bank accounts or real property owned, to secure payment of the claim to the injured party. After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt.

A judgment creditor may also request that the court issue a writ for garnishment of the debtor's wages. If granted, the court order for garnishment is served directly upon the debtor's employer, who must comply with its terms. Wage garnishment is a legal procedure governed by state law in which a person’s earnings are required by court order to be withheld by an employer for the payment of a debt and paid directly to the judgment creditor by the debtor's employer. There are different types of garnishments, as defined by state laws, which vary by state. A garnishment may be made on a one-time or continuing basis. Some kinds of income are exempt, which means that they cannot be garnished at all by creditors for consumer debts, including welfare, unemployment, veterans benefits, Social security, workers' compensation, pensions, and child support payments that you receive. For ordinary garnishments (i.e., those not for support, bankruptcy, or any state or federal tax), the weekly amount may not exceed the lesser of two figures: 25 percent of the employee's disposable earnings, or the amount by which an employee's disposable earnings are greater than 30 times the federal minimum wage.

If the judgment isn't paid, the winning party, called the judgment creditor, may get an "Order for Examination of Judgment Debtor." This is a procedure used to find out where the judgment debtor works, keeps money, and what assets he or she possesses.

If a LLC is created with knowledge of an impending claim, it is possible the LLC assets could be challenged as a fraudulent conveyance. For example, transfering assets to a LLC right before filing bankruptcy may throw up red flags for examination.

The elements of a fraudulent conveyance transfer are defined as follows by the Uniform Fraudulent Transfer Act:

(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:

(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or

(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:

(i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or

(ii) intended to incur, or believed or reasonably should have believed that he [or she] would incur, debts beyond his [or her] ability to pay as they became due.

In some cases, it is possible to sue a person individually under an alter ego theory, in which the court will "pierce the corporate veil" to find that person liable when there is really no separate identity of the individual and corporation. Whether the alter ego theory applies will be a determination for the court, based on the facts and circumstances in each case.

Please see the following CA statutes:


http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ccp&group=00001-01000&file=488.600-488.620

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Yes, a lien can be placed on a house that is held in a trust. If the trust property is associated with a debt or judgment against the trust or its beneficiaries, creditors may file a lien. However, if the beneficiaries have no connection to the debt, they may have grounds to contest the lien's validity.