A judgment debtor may have little cash in a bank account but still receive rent, licensing royalties, or customer payments. An assignment order in California can redirect certain rights to payment toward an unpaid judgment. For California businesses and individuals, understanding this remedy means knowing which payments qualify, what evidence the court needs, and why an order does not necessarily produce immediate cash.
What a California assignment order does
California Code of Civil Procedure § 708.510 allows a judgment creditor to ask the court to assign all or part of a judgment debtor’s right to payment. The payment may already be due or become due later, and the right may depend on future developments. The assignment is limited to the extent necessary to satisfy the judgment.
This is a postjudgment remedy, not a way to collect an invoice before establishing liability. The creditor must have an enforceable money judgment against the person or entity whose payment rights are being targeted.
An assignment order differs from a bank levy. A levy generally reaches property through a statutory enforcement process; an assignment order redirects an identified right to payment. That distinction matters when income arrives periodically or depends on ongoing customer relationships.
Our debt collection practice works with businesses and individuals on evaluating judgment enforcement options, including whether payment rights offer a practical collection source.
Which rents, royalties, and receivables qualify?
Section 708.510 expressly identifies several payment categories, including rents, royalties, commissions, and payments arising from patents or copyrights. Although accounts receivable are not expressly listed, they may qualify under the statute’s broad provision for rights to payment due or to become due. The essential question is whether the judgment debtor actually owns the right to receive the money.
- Rents: Payments owed to the debtor under a lease may qualify. Check who owns the rental payment rights and whether another party has a prior interest.
- Royalties: Licensing payments may qualify even when the amount varies with sales or usage. The licensing agreement helps identify the payor and calculation method.
- Receivables: Customer payments owed to the debtor may qualify, including identifiable payments under an existing contract.
- Commissions: Commission rights may qualify, but employment-related payments require separate attention to wage protections and exemptions.
Ownership cannot be assumed. If the judgment is against an individual who owns an LLC, the LLC’s customer receivables are not automatically that individual’s property. A right to distributions may present a different enforcement question. Likewise, a judgment against a company does not automatically expose its owners’ personal rental income.
Evidence and procedure for requesting an order
Under § 708.510, the creditor applies by noticed motion. Notice must be served on the judgment debtor personally or by mail. The motion should identify the payment rights sought and explain how they belong to the debtor. Broad allegations that the debtor probably earns money are less useful than contracts, invoices, or records identifying an actual payment source.
A practical preparation checklist includes:
- Confirm the judgment balance. Account for payments, accrued interest, and any properly recoverable costs.
- Identify the debtor precisely. Match the judgment debtor to the party entitled to payment under the relevant agreement.
- Document the payment stream. Gather leases, licensing agreements, invoices, payment histories, or other supporting evidence.
- Investigate competing claims. Look for prior assignments, security interests, or other restrictions affecting the receivable.
- Draft a specific proposed order. Identify the payment rights and the scope of the requested assignment.
A judgment debtor examination and authorized postjudgment discovery may help locate these records. Discovery must follow applicable procedures; a judgment does not authorize unrestricted access to another person’s financial information.
Limits, exemptions, and competing rights
An assignment is not automatic merely because a judgment remains unpaid. Section 708.510 directs the court to consider relevant circumstances, including the unpaid judgment balance and the amount the debtor receives or expects to receive. When the debtor is a natural person, the court also considers reasonable support requirements for the debtor and people the debtor supports.
Exemption protections can apply to assigned payment rights under Code of Civil Procedure § 708.550. To claim an exemption, the judgment debtor must file a noticed motion no later than three days before the assignment-order hearing, personally serve the judgment creditor no later than three days before the hearing, and support the claim with the required affidavit. Failure to claim the exemption waives it. Business revenue and protected personal income should not be treated as interchangeable.
The order also does not erase the underlying contract or improve the debtor’s rights against the payor. Under Code of Civil Procedure § 708.540, the assigned right remains subject to the obligor’s rights. For example, a genuine dispute over whether an invoice is payable can affect collection.
Prior interests, bankruptcy restrictions, and disputes about ownership may require additional analysis. The strongest collection target is not necessarily the largest receivable; it is a payment right that belongs to the debtor and is realistically collectible.
Putting the order into effect
Obtaining the order is only one step. Under § 708.540, the person obligated to make the payment is not required to pay the assignee until receiving notice of the assignment order. Accurate identification and notice to the tenant, licensee, or customer therefore matter.
Keep records of notices, payments received, and the remaining judgment balance. The assignment cannot justify collecting beyond what is owed. If circumstances change, Code of Civil Procedure § 708.560 provides a procedure for modifying or setting aside the order. Nonpayment may require further court proceedings rather than informal pressure on the payor.
Talk to a California business attorney
Whether you are pursuing an unpaid judgment or responding to an assignment request, a free consultation can help you assess payment rights, exemptions, and next steps. Schedule a free consultation or call (424) 603-8888.
This article is attorney advertising and provides general information only. It is not legal advice and does not create an attorney–client relationship. The law changes, and this article reflects the law as of its publication date. Every situation is different — contact us to discuss how the law applies to your exact circumstances. See our full disclaimer.
