We are regularly retained by out-of-state creditors to go after local debtors. We often domesticate foreign judgments for our clients here in Florida. Often, those creditors already have an idea on what they want to do from a collection standpoint. Perhaps these creditors might have analysts or have already used a private investigator to research the Debtor before they come to us. Often creditors may have identified assets they seek to levy before they contact us
Look More Closely at the Asset
The Creditor might say “I can see the Debtor owns a 2020 Mercedes AMG GT Coupe (MSRP $116,000); can I take that?” My answer, which is often maddening to my clients, is often “it depends.” “What do you mean? I want that car!”
Locating certain assets which may be subject to execution is a relatively straight-forward process (assuming there hasn’t been fraudulent transfers that is). Things like cars require title registrations that come up easily in public records searches. The questions that are rarely considered after a client locates such an asset are: 1) is the asset owned outright by Debtor (or is it being leased or financed); 2) Is that asset owned individually owned or subject to an exemption or claim of another; and 3) are the costs associated with levying this asset worth what the asset will get you at a levy sale.
One thing that many are not readily clear about. A levy is when the county sheriff seizes an asset and sells it an auction. The sale proceeds are then used towards satisfying the judgment. I know many know this, but you’d be surprised how some folks think it means you get the asset handed to you. While judgment creditors are usually entitled to a credit bid up to the amount of their judgment, it’s important to know this. Assuming you have perfected your judgment lien as we discussed here, other considerations must be made before the levy is effectuated.
Levy Considerations
In your 2020 Mercedes example, if your car is leased, you cannot take it because title belongs to the lessor (though if the lease is pre-paid there might be an argument that the pre-paid lease is an asset, but this hyper technicality will not be discussed here). What if our debtor owns the vehicle jointly with her spouse or domestic partner? Again, you may not be able to levy the asset if it is subject to an exemption like tenancy by the entireties. Is the car subject to financing? If so you would take subject to the car note. Finally, would the asset be worth it even if these hurdles are not present?
The Auction
In our 2021 Mercedes example, if the debtor owns the car outright (high roller) it most likely worth it. If you levy the car, the car will then be in auctioned. Then, if the auction is competitive, you may be able to collect a good amount. It is important to note: often auctions are not well publicized, and bidding can be outright pathetic.
If you have specialized assets like art or collectibles, you might need to market the auction so bidding can be competitive. Otherwise, at the sale you will have a bunch of bargain shoppers, looking for a deal. In this instance, you might want to reach out to car dealers in the area and notify them of the levy sale in an attempt to raise competitive bidding. Of course, check with Florida Bar to determine what information you can provide and in which manner you can provide it.
We had one levy where we levied the contents of a storage unit and someone purchased boxes/personal effects and asked me for the contact information of the debtor so he could sell the guy’s family photos back to him…. I of course did not cooperate, but man it’s a dog-eat-dog world out there friends.
It’s my hope this article was able to illustrate some of the numerous issues tangential to a levy. Contact our firm today to discuss any post judgment collection questions you have.