subject: Judgment Collection Costs [print this page] I am not an attorney, I am a judgment matchmaking specialist (Judgment Broker). This article is my opinion, based on my experience in California, and laws vary in each state. Nothing in any of my articles should ever be considered legal advice.
In this article, when "MC-12" is used, it means a Memorandum Of Costs form. MC-12 is a California judicial council form. (See my other article on MC-12 forms.)
When a MC-12, or an equivalent motion, affidavit, or form is used, it means to document and record itemized judgment enforcement costs at the court, which adds specific costs to a debtor's debt.
In California, one must claim costs within 2 years of spending them, and costs are added to the judgment after these three tasks are complete:
1) A MC-12 form is filled out, and a copy of it is usually mailed, and occasionally personally served on the debtor, by someone who completes a proof of service for it.
2) The MC-12 and the proof of service (POS) for it, is filed at the court.
3) The calendar time limit, for the debtor to object to the MC-12 has expired.
In California, if you are claiming any type of cost, the debtor must be served a copy of the completed MC-12. The debtor is allowed ten days if personally served, and fifteen if they are served by first class mail, to object to your MC-12.
Not every recovery expense can be added to a judgment. Each state has different laws. Usually, examples of allowed expenses are the costs of getting or serving a garnishment, abstract of judgment, writ, levy, judgment debtor examination, UCC lien, etc.
One cannot claim lawyer fees to recover a judgment unless the contract the judgment was based on, allowed for attorney fees. One also cannot deduct coffee, postage, your time (if not a lawyer), parking fees, mileage, or many other non-court related costs.
In California, judgment interest is currently 10% simple interest per year, and is not compounded, except at renewal. In calculations, you need to truncate interest rates downward, not round them up. (0.6039 becomes 0.603.)
Interest is not added to the principal owed on a judgment. Allowed costs are added to the judgment principal. Once costs are added, they increase the rate that the judgment interest accruals at.
It is best to download the MC-12 form, or the equivalent form for your state, from a court web site, and fill it out as a fillable PDF and print it. Second best is typing it, last choice is printing it out by hand.
Very few courts require copies of receipts for what is claimed. However, I've met a few courts that wanted to see receipts for writs and abstracts issued recently by the same court, which make very little sense.
When you claim costs, you must have someone else, over the age of eighteen and not related to the case, print and sign their name on the MC-12's POS, and put the MC-12 in an envelope that is mailed to the debtor.
You can pre-fill out everything, except where the person that serves the debtor prints and signs, which makes it easy for them. The POS (documenting that the MC-12 was delivered to the judgment debtor) may be served personally, or (much more likely) served by first class mail.
When there are no costs, you can type "(No proof of service required - No costs, interest Only)" in the "My Address" area at the top of the page, and date and sign at the bottom of the page. A few court staff do not fully know the law about this, and will want the MC-12 served even when there are not any claimed costs. Asking for a supervisor often gets a MC-12 approved having no costs and no POS, if you sign the POS page.
When the MC-12 is filled out as much as you can (everything except the printing and signature of the person who will be serving it), make two copies of it, because one copy must be served on the judgment debtor.
You need to prepare a stamped envelope, with your name and address on the return envelope, and the judgment debtor's last known address. You should do some due diligence to verify the address of the debtor is correct.
Do not put anything related to debts or judgments owed on the envelope. Self-sealing envelopes are good. Pages should be folded inward to protect the privacy of the debtor. You do not need a cover letter in the envelope, only the MC-12.
The person serving the debtor cannot be you. It can be a process server, someone that works a mailbox rental store, a friend, etc. They might charge you. (If they do not charge you, consider giving them a gift once in while.) They must sign page 2 of the MC-12, (I recommend lending them a blue pen to sign, which will show the original copy that the court needs), seal the envelope, and deposit the stamped and sealed envelope addressed to the judgment debtor, in an active mailbox or the post office.
After the envelope is mailed, and the POS is signed, make a copy of the page signed by the person that served the debtor. Be sure you have two complete copies of the MC-12, with the first page and the POS pagestapled together.
Bring or mail both copies to the court. They will stamp both, keep the original copy, and return the other copy to you. Keep your copy, for your records.
