Once a judgment is entered against a debtor, California law provides for a variety of collection methods available to the creditor if the judgment remains unsatisfied. If unable to reach a voluntary payment arrangement, a creditor may place a lien on property held by the debtor, garnish wages and attach a levy to any monies held by financial institutions. In the past, levies against bank accounts were primarily placed against accounts held at traditional banks known as a "bank levy." However, the digital age has ushered in a new type of bank account that is held and managed online. Accounts administered by online entities such as Paypal are increasing in popularity and are subject to the same collection practices as traditional bank accounts.
Order of Examination
If a debtor fails to satisfy a judgment 30 days after entry, and has not filed a Motion to Vacate, they are required to submit to the creditor a Statement of Assets. If a debtor neglects to supply the Statement of Assets, the creditor may then make application to the court for an Order of Examination. Once an Order of Examination is issued, the creditor may depose the debtor under oath to submit to questions regarding earnings, monies held by financial institutions and property holdings. During the proceedings, the creditor’s attorney should be sure to make an inquiry regarding any online bank accounts such as Paypal, or the debtor may fail to disclose the account information.
Obtaining a Writ of Execution
Once it is determined that the debtor holds money in an online bank account, the creditor must obtain a Writ of Execution. A Writ of Execution is a signed order directing a sheriff or marshal to enforce the judgment in their jurisdiction. Although the exact requirements for obtaining a signed Writ of Execution vary by county, the first step is to submit to the court a proposed Writ and supporting affidavit. While some judges will require the creditor to appear, others may issue the writ upon contemplation of the submitted papers. Once a writ has been issued, it is valid for 180 days from entry by the clerk.
Serving the Writ of Execution
Once entered by the court, the creditor must then serve the writ and a Notice of Levy upon both the financial institution and the debtor in order to obtain a bank levy. The method of process varies by county, but will generally be completed by a process server, county sheriff or marshal. If no opposition is filed by the debtor, the funds will be remitted to the creditor to be applied towards the judgment balance. In Section 10.4 of its user agreement, Paypal acknowledges their compliance with court orders directing the release of funds, “PayPal, in its sole discretion, may take various actions including placing a hold, Reserve, or other limitation on your Account or the funds in it and/or releasing any or all of your funds in the event it receives notice of a court order or other legal process that restricts the use of or access to your funds or requires their release.”
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- Enforcement & Lawsuits
Enforcement How to Place a Bank Levy on Online Accounts in California
By Richard Evanns |
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