Wednesday, December 27, 2006

Using a Judgment Lien on Personal Property

Judgment creditors in California often overlook a very simple yet effective lien available to help enforce any judgment: a judgment lien on personal property ("JLPP"). A California judgment creditor can obtain a judgment lien on certain types of personal property (equipment, inventory, farm products, accounts receivable, chattel paper, negotiable documents of title) by filing a Notice of Judgment Lien with the California Secretary of State. The title JLPP is somewhat of a misnomer because the type of lien has more impact on the assets of a business rather and individual judgment debtors.

Like the judgment lien on real property, the judgment lien on personal property is a passive lien in that does not disturb the debtor's possession and use of property. Judgment liens can sometimes better serve the interests of the judgment creditor because they establish priority and are less likely to push the debtor into bankruptcy. A JLPP is particularly effective against business debtors because it can impede a debtor's ability to obtain secured financing under Article 9 of the Uniform Commercial Code.

A JLPP is one of many methods available to California judgment creditors. If you need assistance in collecting an unpaid judgment in California, please contact us for a complimentary consultation.

About the Author
Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

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