Liens And DBAs

Several times a week, judgment creditors contact me and claim they have a solid gold judgment worth a lot of money cash up-front; because they sued a business and already filed a lien against the business, and while that business is doing poorly/out of business, the person who owns the business is rich, so "all you have to do to collect is to go after that guy to make them pay the judgment".

The problem is, when a business is a corporation, it usually protects the owners from all the business's debts. If that company had a slightly different name than was listed on that judgment, it can be fairly simple to modify a judgment to correct their name, if there are no new entities added.

If a judgment creditor did not sue an individual, there is only one way to try and include an individual to that judgment later is to attempt to prove some kind of fraud with another lawsuit. There's 3 drawbacks to this idea; it's very costly, there is no guarantee it will be successful, and it won't help when there's insufficient assets. Judgment buyers pay very little cash upfront for judgment circumstances like this.

This article is my opinion and is not, legal advice. I'm a judgment recovery expert, and not a lawyer. When you want legal advice or a strategy to use, you should contact an attorney.

Some other judgment owners tell me that they own a judgment debtor that is a DBA (Doing Business As) business and recorded their lien against the DBA business, "So their lien also attaches to that company owner's condo". The problem is, a lien only attaches to the exact name(s) named on their judgment which supports that lien.

A DBA, also known as FBN (Fictitious Business Name) is an alternative name for individual(s) and is not a different person legally. A judgment only against a FBN name itself, must get amended for a chance for the judgment to be recovered, and a recorded lien against just a DBA usually has no power.

Even though a DBA/FBN is not a separate legal entity, it can be viewed as a distinct entity. This means in most states, bank accounts in the name of DBAs may be garnished if the creditor supplies proof and a declaration 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 a non-expired FBN document that has been certified.

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

Title companies aren't obligated to look at name variations or company AKA names of the real estate property owners. It is the responsibility of the creditor to make sure their lien attaches. A lien in the name of Dan Debtor will probably not ever attach to real estate property that is owned by the name of Dave D. Debtorman, II. One solution is to get your judgment amended to include the name of the owner of the business. In California, this is very often done using an affidavit of identity.

Then you could file your brand new lien updated with the information on that amended judgment, however that would cause that new lien to lose the lien priority that it formerly had. The better way to go is to file an amended lien (in California, this is covered by Code of Civil Procedure 674), because that preserves the lien's original recording date priority. Your amended abstract/lien will retain it's original date of filing for lien priority if it's correctly completed by (e.g.) putting a check in the right box on the form, and listing the original lien filing number.


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Mark Shapiro of: http://www.JudgmentBuy.com - The easiest and fastest free method of finding the best professional to buy or recover your judgment.