Legal Question in Credit and Debt Law in California

Re: reposessed,sold,money still owed

If a creditor sues a debtor and obtains a judment issued by the court, it can then begin enforcement proceedings. This can include a wide variety of methods to collect the amount of the judgment, and may include the sale of a personal residence. However, most creditors will not try to sell a home unless there is a great deal of equity in that home.

Other methods are available to creditors in California to enforce a judgment. They can "garnish" a debtor's wages, levy against bank accounts (the creditor can take the money directly out of the debtors bank accounts if the appropriate procedures are followed), and force others who owe the debtor money to pay that money to the creditor, among other things.

If the debtor owns a home (or other real property), the creditor can apply to the court to have the home sold. However, in California, every debtor has a statutory "exemption" which applies to their residence in amounts which vary depending upon the debtor's age and other circumstances. If there is sufficient equity in the home, then the creditor may decide to pursue this enforcement technique. For instance, if the home is worth $300,000.00, the judgment is for $100,000.00, the exemption is $75,000.00, and the debtor owes $100,000.00 on the home, there exists approximately $125,000 in equity ($300,000 - $100,000 (owed on home) - $75,000 (exemption) = $125,000 in equity). In the foregoing example, there may be sufficient equity in the home for the creditor to sell the home, recover all of the judgment, together with the costs of selling the home (which would be substantial).

You must also remember that, in California, interest at the rate of 10% per annum accrues from the date of entry of judgment until the judgment is paid.