Articles Posted in Judgment Collection

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Arizona law provides penalties in the form of substantial statutory damages plus awards of costs and legal fees for recording false documents under A.R.S. §33-420. Pertinent provisions of this statute are as follows:

  1. A person purporting to claim an interest in, or a lien or encumbrance against, real property, who causes a document asserting such claim to be recorded in the office of the county recorder, knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is liable to the owner or beneficial title holder of the real property for the sum of not less than five thousand dollars, or for treble the actual damages caused by the recording, whichever is greater, and reasonable attorney fees and costs of the action.
  2. A person who is named in a document which purports to create an interest in, or a lien or encumbrance against, real property and who knows that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid shall be liable to the owner or title holder for the sum of not less than one thousand dollars, or for treble actual damages, whichever is greater, and reasonable attorney fees and costs as provided in this section, if he willfully refuses to release or correct such document of record within twenty days from the date of a written request from the owner or beneficial title holder of the real property.
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One of the best parts of practicing law is performing well in Court and obtaining a Judgement in favor of a Client. Once Final Judgment is obtained the next step is to collect.   Sometimes this is a straightforward process; the traditional remedies of garnishment and execution produce results and the judgment is satisfied.   Many times, however, it is not so easy.   An investigator may be needed to locate income and non-exempt assets from which the judgment can be paid. The investigator must search not only for assets that are currently owned but also for assets that were formerly owned. Transfers by a judgment debtor need to be carefully scrutinized. It is common for debtors to try to protect assets by transferring them out of their personal names.   Where a transfer is fraudulent, the asset transferred can often be recovered.

Arizona’s Uniform Fraudulent Transfer Act is found at ARS 44-1001 et. seq.   Essentially, Arizona’s law states that a transfer is fraudulent as to a creditor if it was made with the actual intent to hinder, delay or defraud. A transfer is also fraudulent if it was made without receiving a reasonably equivalent value in exchange and the transferor was either insolvent at the time or was rendered insolvent as a result of the transfer.

When a transfer has been shown to be fraudulent, a creditor has many remedies. A creditor can seize the asset transferred by a garnishment against the fraudulent transferee or by an attachment against the asset transferred. A separate action can be filed to avoid and reverse the transfer and a receiver can be appointed to take charge of the asset transferred.

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ARS 33-1022 (A) entitles a garage or repair facility to a lien over a vehicle for unpaid repair charges when the owner and the garage agree on the amount of the charges.

A recent case, Beck v. Hy-Tech Performance, Inc. 1 CA-CV 13-0723 decided January 8, 2015, speaks to what happens where the vehicle owner and the garage do not agree to the amount of the charges.

The Court of Appeals decided that the Garage is still entitled to a lien, but only for the amount of the agreed charges.

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Collection of a judgment can sometimes be more difficult and expensive than obtaining it in the first place.

Once you have endured the lawsuit process and have obtained a judgment, the next step is collection. One powerful collection tool is to record the judgment. A.R.S. §33-961 (A) provides that the recording of a judgment creates a judgment lien against any real property either currently owned or subsequently acquired by the judgment debtor in the County where recorded. In practice, a judgment lien will usually be paid if the real property is sold or refinanced. But not always. Beware of A.R.S. §33-961 (C) which requires that a judgment information statement be attached to the judgment.
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