Prejudgment Writs of Attachment: The Strategic Benefits

In collections cases, securing payment from a debtor can often be a challenging, time-consuming, and costly process, especially with dilatory or slippery debtors. California law provides creditors with a powerful tool to expedite the recovery process: prejudgment writs of attachment. These legal remedies offer significant strategic benefits for plaintiffs, helping them protect their interests, increase the likelihood of successful debt recovery, and even shape the course of litigation.

This article explores the strategic advantages of applying for prejudgment writs of attachment in California collections cases, with a particular focus on how they can help flush out the defenses and legal theories of the defendant at an early stage to direct discovery effectively.

  1. Statutory Authority

The primary source of authority for prejudgment writs of attachment comes from Cal. Code Civ. Proc., § 483.010. It permits prejudgment writs of attachment for claims based in contract, for an amount that is reasonably certain and above $500, where the claim is deemed probably valid. Probable validity, while a seemingly low bar, is often treated more like a summary judgment standard by more courts, meaning courts are unlikely to grant a prejudgment writ of attachment unless any defenses presented have little plausible chance of prevailing.

Prejudgment writs are also sometimes available in other scenarios, such as elder abuse under Cal. Welfare & Inst. Code, § 15657.03, or for voidable/fraudulent transactions or transfers under Cal. Civ. Code, § 3439.07(a)(2).

  1. Immediate Asset Preservation

One of the primary strategic benefits of pursuing a prejudgment writ of attachment in California is the ability to freeze the defendant’s assets pending the outcome of the lawsuit. This means that plaintiffs can prevent debtors from disposing of or hiding valuable assets that could be used to satisfy the judgment. By securing assets through attachment, plaintiffs gain a critical advantage in ensuring they have access to the necessary funds for repayment at the end of the lawsuit, avoiding the dilemma of “throwing good money after bad” in a collections case.

  1. Enhanced Collectability

Another key advantage of pursuing a prejudgment writ of attachment is the increased collectability of the judgment. When assets are attached, plaintiffs are more likely to recover their debt, as there are tangible resources available to satisfy the judgment. This is particularly beneficial in cases where the defendant might otherwise be inclined to transfer assets out of reach or engage in fraudulent activities to avoid paying their debt.

  1. Deterrence Effect

The mere threat of a prejudgment writ of attachment can act as a powerful deterrent to debtors who might be considering evading their financial obligations. Debtors may be more willing to negotiate a settlement or agree to a repayment plan when they realize that their assets are at risk of being attached. This strategic advantage can save plaintiff’s time, money, and effort that might otherwise be spent on protracted legal battles.

  1. Priority in Asset Distribution

In cases where multiple creditors are seeking repayment from the same debtor, obtaining a prejudgment writ of attachment can provide plaintiffs with a priority claim on the attached assets. California law grants a first-come, first-served priority to creditors with writs of attachment, giving plaintiffs a strategic edge in securing their portion of the debtor’s assets before other creditors can make their claims.

  1. Increased Leverage for Settlement Negotiations

Prejudgment writs of attachment can be a potent negotiation tool. When a debtor realizes that their assets are at risk, they may be more inclined to engage in settlement negotiations to avoid the attachment process. Plaintiffs can use this leverage to reach mutually beneficial agreements with debtors, potentially resolving the matter more quickly and efficiently. Moreover, if the writ is granted, and assets are attached, those assets are no longer available to the creditor, potentially for years, depending on how long the litigation takes. In some ways, to the debtor, it is the functional equivalent of having already paid the money back, making them more inclined to write off that money and cede it to their creditors in any settlement negotiation, often increasing the total value of any settlement.

  1. Flushing Out Defenses and Legal Theories

An often overlooked but crucial advantage of pursuing a prejudgment writ of attachment is the opportunity it provides to flush out the defenses and legal theories of the defendant at an early stage of the litigation. When a writ of attachment is sought, defendants are incentivized to present their defenses and legal arguments to contest the attachment, leading to early disclosure of their positions.

This early revelation of defenses and legal theories can be invaluable in shaping the discovery process. Plaintiffs can tailor their discovery requests and deposition strategies to address the specific issues raised by the defendant. This not only streamlines the litigation process but also helps plaintiffs build a stronger case by focusing on the areas where the defendant’s position is vulnerable.

  1. Conclusion

In the complex landscape of collections cases in California, plaintiffs face numerous challenges in recovering their debts. However, the strategic benefits of pursuing prejudgment writs of attachment cannot be overstated. These legal remedies offer plaintiffs the opportunity to preserve assets, enhance collectability, deter debtor misconduct, secure priority in asset distribution, gain valuable leverage in negotiations, and critically flush out the defenses and legal theories of the defendant at an early stage. By harnessing the power of prejudgment writs of attachment, plaintiffs can significantly improve their chances of successful debt recovery, protect their financial interests effectively, and shape the course of litigation in their favor.

The attorneys at Atabek & Co are highly experienced in obtaining prejudgment writs of attachment, large and small, whether tens of thousands or millions of dollars. Please contact us if you want to know if an application for a prejudgment writ of attachment is right for your case.