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  1. #1
    Join Date
    Jun 2010

    Default Federal vs. State Judgment Enforcement

    State: California
    My sister will be assigning me a federal judgment issued in Louisiana. I will be attempting to collect this from here in California. I have a choice between going through State or Federal courts for purposes of debtor's exam, etc.

    Does anyone know where I could find an intelligent analysis of pros/cons of enforcing a judgment collection action in state court versus federal court?

  2. #2
    Join Date
    Mar 2009
    Key West, FL

    Default Re: Federal V. State Judgment Enforcement

    It is a federal judgment, thus I believe it should be filed with the Clerk of the US District Court in your district. A federal proceeding is also going to scare the crap out of the debtor better than a state court enforcment action.

    Of course, just about anything is more expensive in federal court and getting a hearing is going to likely take longer too. But only a local attorney is really going to know the details of that.

    You can also, I believe, file it with the state court. The full faith and credit clause of the constitution allows you to file it in any court in the US for enforcement.

    A consideration might be how much the filing fee is in each court.

    You'd be best to consult an attorney in your district that is admitted to the federal court. If you talk to an attorney who doesn't practice in federal court, he is going to just tell you to file it in state court.

    You are going to likely need an attorney to do the paperwork to get the debtor to appear at a deposition, arrange the court reporter, etc. so you can discover all their financial details, get ss number, etc. Then you can start seizing the contents of their bank accounts once a month, garnish wages, etc. unless they work out and stick to a payment schedule or something.
    If they have a house, car, boat, or business that is not exempt from execution, I would go after that too, depending of course on the size of the judgment.

  3. #3
    Join Date
    Sep 2005
    Behind a Desk

    Default Re: Federal vs. State Judgment Enforcement

    As the assignee of the debt, I would expect that you will have to file an original action to collect the debt. It's not as if you're a lawyer who is representing your sister in court, such that she remains the plaintiff. As a consequence, I'm not sure that you can use the federal court for collection purposes if you and the defendant are from the same state, or the amount of the judgment is less than $75,000.

    Federal court can be unfriendly places to pro se litigants. That can work to your advantage if you know what you're doing and the other party does not. It can work to your disadvantage if you're trying to represent yourself and they either have a lawyer or are experienced defending themselves agains this type of proceeding.

    State court proceedings are apt to be faster, and a state court is less apt to view a collection proceeding or debtor's exam as a nuisance. State courts are also often more user-friendly for pro-se litigants, and California offers a lot of information and forms online for legal self-help.

    Depending on the amount of the judgment and the probability of being able to collect it, your sister may be better served by hiring a collection agency or collections law firm to handle the judgment for her. Granted, the fees will typically be from 1/3 to 1/2 of the amount collected, but particularly if collection will be difficult or the defendant's resources are hard to locate that may not be a bad deal.

  4. #4
    Join Date
    Jun 2010

    Default Re: Federal vs. State Judgment Enforcement

    These are some excellent points. I hadn't stopped to consider that Federal Court might not be willing to handle a supplemental proceeding on its own ruling. (Which was based on a federal question, not diversity.) I will have to do more research on this. There are some advantages in Federal court that I'm aware of, but maybe not significant ones. I have seen nothing in my readings regarding assigning judgments that would indicate the need for an original action; just a notice/acknowlegement of the assignment to be filed.

    State court is physically much more convenient for me, but I have noticed a pretty wide spread in judicial abilties. There are some excellent judges, but there are also some who have virtually no interest in the subtleties of the C.C.P.

    I have searched high and low for a collection agency to take on the collection of this, but none are interested as the JD is a professional deadbeat (and an attorney) - a U.S. citizen who is currently living in Mexico. There are likely no assets in California, but I will need the Debtor Examination to get at other potential assets. The judgement is now at about $34K. Significant for me, but not enough to interest a professional judgment enforcer given the difficulties presented.

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