The legal system is designed so that different courts have different jurisdictions. Generally speaking, those who wish to take legal action against a debtor must file papers in the jurisdiction where the debtor owns assets. For example, they may reside in New Mexico, but most of the debtor’s assets could be investments located in California. So, suppose the debtor owes money to a New Mexico-based business/creditor and lost a judgment in that state. It may be necessary to take control of assets that satisfy the judgment even when located in California.
Common methods for collecting that debt include:
- Levy a bank account (including a safe deposit box)
- Levy a vehicle
- Serve a third-party debtor examination
Recognizing a foreign judgment
While California is one of the few states that did not enact the Revised Uniform Enforcement of Foreign Judgments Act, the good news is that foreign judgments can be domesticated and enforced in California using a sister state judgment in the same manner as California judgments. Still, the California courts must first recognize the claim. There are two categories, but approval is on a case-by-case basis:
- Sister state judgments: These apply to rulings requiring money payment issued in other U.S. states.
- Foreign country money judgment: California may recognize a debt owed under foreign law.
If the debtor is not a resident, the courts allow collection proceeding to begin immediately.
Collection attorney handles these matters
Collection agencies are great for sending letters and calling debtors, but someone who understands collections law here in California should handle the matter. They can work with out-of-state clients to resolve debt issues involving California-based assets.