Legal Question in Credit and Debt Law in California

This is complicated legally. If the assets were collateral for the loan and the person suing had a lien on the collateral to secure the loan, the lien may have been lost by bringing the small claims case.

The secured party was supposed to have repossessed the collateral (security for the loan) before suing. By electing the remedy of suing to obtain a judgment instead of repossessing the collateral, the party holding the note who sued will probably not be able to collect more than the amount of the judgment and may have lost the right to repossess the collateral. The lien may be gone. This is an election of remedies issue, a one action issue and a collateral first issue.

Also, by going to Small Claims the person suing has agreed to limit the recovery to the maximum jurisdiction of the Small Claims Court which is $7,500. It says so on the Small Claims complaint.

This will require legal research but it sounds like the person who obtained the judgment is now limited to collecting the amount of the judgment and no longer has a lien on the collateral. The collateral can be attached by legal process to enforce the judgment but probably any amount resulting from the sale of the collateral over $7,500 plus costs and interest will have to be paid to the owner of the collateral. You better go to a lawyer to review the situation and give you specific legal advice. This is only information based on the limited facts given so it might not be accurate. You should only rely on your own lawyer, particularly on a complicated legal situation like this...