How Does Assignment of Judgment Work in California?

An assignment of judgment in California transfers a creditor’s right to collect a court judgment to someone else, usually for a lump-sum payment. To make the transfer effective and enforceable, you need two things: a written assignment agreement between the parties, and an Acknowledgment of Assignment of Judgment filed with the court that entered the original judgment under California Code of Civil Procedure Section 673. The filing is what makes you the “assignee of record” and gives you priority over competing claims to the same judgment.

The Two Steps That Complete an Assignment

People often collapse the assignment into a single event. It isn’t. There are two distinct steps, and skipping the second one causes most of the problems that show up later.

Step one is the written assignment agreement. The original creditor (or a prior assignee) and the new assignee sign a document that transfers the right to collect. Under California Civil Code Section 954.5, the transfer is “perfected” against third parties the moment that written assignment is delivered to the new assignee.¹ The agreement typically covers the purchase price, identifies the specific judgment, and spells out any conditions the parties negotiated.

Step two is filing an Acknowledgment of Assignment of Judgment with the clerk of the court that entered the judgment. This makes the assignee the “assignee of record.” Without it, the assignee holds the right to collect on paper but will hit obstacles getting courts and sheriffs to act, because official records still list the original creditor as the judgment holder.²

What the Acknowledgment Must Contain

CCP Section 673 is specific about what the acknowledgment needs. Missing pieces are a common cause of rejected filings.

The court where the judgment was entered and the case number.
The date the judgment was entered, any renewal dates, and where those entries appear in court records.
The judgment creditor’s name and address, and the debtor’s name and last known address.
A description of the right being assigned, meaning the portion of the judgment rights transferred.
The name and address of the assignee.

The statute asks for a description of the right assigned, not a specific dollar amount owed. Some online guides state the acknowledgment must include an “amount due”; that is not a statutory requirement.²

Signing and Notarization

The acknowledgment must be executed “in the manner of an acknowledgment of a conveyance of real property.” In practice, that means signing before a notary public, the same way a deed is signed. The person who signs must be the judgment creditor or the prior assignee of record.²

When an Agent Signs

If an authorized agent signs on behalf of the creditor or prior assignee, the filing has to include documentation proving the agent’s authority. A power of attorney or a corporate resolution will usually do the job, depending on the situation. Forgetting to attach this proof is one of the most frequent reasons clerks reject filings.²

Why Filing With the Court Matters

The acknowledgment does more than update a record. Civil Code Section 954.5 creates a priority rule for competing assignments. If the same judgment gets assigned to two different people, whether through mistake or fraud, the one who first becomes assignee of record wins. The loser is left chasing the dishonest creditor, not collecting from the debtor.³

Filing is also not the same as notifying the debtor. If the debtor pays the original creditor without knowing about the assignment, those payments still count toward satisfying the judgment. The assignee’s remedy runs against the creditor who took money they no longer had a right to, not against the debtor. That makes directly notifying the debtor a practical necessity, even though no statute explicitly requires it.³

What the Assignee Can Do to Collect

Once the acknowledgment is on file, the assignee inherits every collection tool the original creditor had. Wage garnishment lets a debtor’s employer withhold a portion of each paycheck. Bank levies let a sheriff seize funds from the debtor’s account. Property liens attach the judgment to the debtor’s real estate and block a clean sale until the debt is paid.

The assignee also takes on the recordkeeping burden. Every enforcement action and every payment received needs accurate documentation. If a dispute arises later about what remains owed, sloppy records can undermine the assignee in court.

Interest That Accrues on the Judgment

What a judgment is worth depends heavily on the applicable interest rate, because that determines how fast the balance grows while collection is underway. California sets different rates depending on the debtor and the type of debt:

The standard rate is 10% per year on the unpaid principal.
When the debtor is a state or local government entity, the rate drops to 7% per year.
A 5% rate applies when the debtor is an individual, the judgment was entered or renewed after January 1, 2023, and the claim involves personal debt under $50,000 or medical expenses under $200,000. Judgments based on fraud, intentional wrongdoing, or unpaid wages do not qualify for the lower rate.

These rates come from CCP Section 685.010 and run from the date of judgment entry until the debt is paid.⁴ The Legislature can change them, so assignees holding a judgment for years should stay current.

Recovering Your Collection Costs

Collection isn’t free. Filing fees, sheriff’s costs, process server charges, and other expenses add up quickly. California lets the assignee recover reasonable enforcement costs by filing a Memorandum of Costs After Judgment (Judicial Council Form MC-012). The costs claimed must have been incurred within the prior two years, and the form is signed under penalty of perjury declaring the costs are correct, reasonable, and necessary.⁵

Once the memorandum is served on the debtor, the debtor has 10 days to file a motion challenging the claimed costs. Without a challenge, the costs are added to the judgment balance. If the memorandum is filed alongside a writ of execution, statutory costs not already approved by the court can be added to the writ, up to a combined $100.⁵

Debt Collection Laws You Now Have to Follow

Buying a judgment doesn’t put you outside debt collection law. Two frameworks overlap in California, and violating either can produce liability that outweighs the value of the judgment itself.

At the federal level, the Fair Debt Collection Practices Act governs anyone who regularly collects debts owed to others. Buying judgments as a business or side venture will almost always make you a “debt collector” under the statute. The FDCPA restricts when and how you can contact the debtor, bars deceptive or abusive tactics, and requires written debt validation on request.⁶

California’s Rosenthal Fair Debt Collection Practices Act (Civil Code Sections 1788 through 1788.33) reaches further. It applies to any person who regularly engages in debt collection and pulls most of the federal FDCPA’s substantive provisions into state law. The Rosenthal Act also covers creditors collecting their own debts, so an assignee buying a single judgment for personal collection still falls under it. For debts sold or assigned on or after July 1, 2022, the Act imposes additional documentation requirements on buyers of delinquent consumer debt.⁷

The 10-Year Renewal Clock

A California money judgment expires after 10 years if nobody renews it. When it expires, all enforcement stops and any existing liens tied to that judgment are extinguished.⁸ An assignee who buys a judgment partway through that window inherits whatever’s left of the clock.

Renewal itself is simple: file an application with the court that entered the judgment before the 10-year period runs out. That extends enforceability for another 10 years, and the renewed judgment includes remaining principal, accrued interest, and allowable costs.⁹

One exception worth flagging: for certain judgments identified in CCP Section 683.110(c), renewal is allowed only once and extends enforceability for five years rather than ten. The deadline to apply is still before the current period expires.⁹

What to Weigh Before Buying a Judgment

The biggest risk is overpaying for something uncollectable. A judgment is only worth what the debtor can actually pay. Before you buy, investigate whether the debtor has real property, steady employment, or business income. Many judgments trade at steep discounts precisely because the debtor has no attachable assets right now.

Bankruptcy creates an immediate wall. If the debtor files a bankruptcy petition, an automatic stay stops virtually all collection activity against the debtor and the debtor’s property.¹⁰ The assignee can ask the bankruptcy court to lift the stay, but that requires a formal motion and specific grounds.¹¹ In many consumer bankruptcy cases, unsecured judgment debts are discharged entirely, leaving the assignee with nothing to collect.

Jurisdiction gets complicated when the debtor moves. Enforcing a California judgment in another state requires “domesticating” it there, typically under the Uniform Enforcement of Foreign Judgments Act or an equivalent procedure. Each state has its own filing rules and fees, and it can take weeks or months before enforcement can begin.

Enforcement costs are the other quiet drain. Sheriff’s fees, process server charges, debtor examination filing fees, and attorney costs all come out of the assignee’s pocket upfront. Many are recoverable through the memorandum of costs process, but only if the debtor eventually pays. When collection stretches on for years, those expenses can eat the profit that made the purchase attractive to begin with.

Judgment purchases can also carry tax consequences, since you’re usually paying a discount and collecting a larger face value. The treatment of that spread, along with any interest collected, gets complicated fast. Talking to a tax professional before you buy is worth the cost.¹²

1
California Legislative Information. California Civil Code 954.5 – Transfer of Right Represented by Judgment
2
California Legislative Information. California Code of Civil Procedure CCP 673 – Acknowledgment of Assignment of Judgment
3
California Legislative Information. California Civil Code CIV 954.5 – Transfer of Right Represented by Judgment
4
California Legislative Information. California Code of Civil Procedure CCP 685.010 – Post-Judgment Interest
5
Judicial Council of California. Memorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest (MC-012)
6
Federal Trade Commission. Fair Debt Collection Practices Act
7
California Legislative Information. California Civil Code Title 1.6C – Fair Debt Collection Practices, Article 2
8
Justia Law. California Code of Civil Procedure 683.010-683.050 – Period for Enforcement of Judgments
9
California Legislative Information. California Code of Civil Procedure 683.120 – Renewal of Judgments
10
Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
11
United States Bankruptcy Court. Automatic Stay, What Is It and Does It Protect a Debtor From All Creditors?
12
Internal Revenue Service. About Form 1099-INT, Interest Income