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Judgment debtors sometimes have other judgments against them and owe money to other judgment owners. Very often, the most ambitious creditor, the first to recover their judgment, is the winner. State and Federal tax (abbreviated in this article as IRS) judgment garnishment procedures are stronger than common judgment garnishments, so does a current or future IRS judgment against your judgment debtor mean it is game over for a common judgment creditor? Not always. My articles are my opinions and are not, a legal opinion. I am a judgment broker, and not an attorney. If you need a strategy to use or legal advice, you should retain an attorney. The general rule is that all other things being equal, IRS levies outrank regular judgment owner levies. If the IRS is already levying your judgment debtor's available assets, your garnishment won't work so you need to wait until they are finished; and then try to collect any available debtor assets which may be left. If the IRS learns about your garnishment actions and/or finally finds your judgment debtor's available assets, you need to give up and let the IRS do their thing. The IRS will stop your levy and start their levy, and tack on their own fines and penalties as they garnish your debtor's available assets; sometimes leaving almost nothing for any other judgment owners. Yet, a very ambitious judgment owner, especially having a small judgment, could garnish their judgment debtor's assets before the IRS grabs them. If the IRS notices and learns of your levy and demands you return the money you levied or to do something, you need to comply immediately; although this very rarely happens. With judgment debtors having more than one judgment lodged against them, it usually depends on how aggressive the creditors on the other judgments become. The majority of creditors do nothing, and if a single judgment owner knows more about the possible recovery options and more ambitious in their enforcement; the creditor won their judgment first often does not matter. Most often, the squeaky wheel gets the grease; and one example is the California Coastal Commission v. Allen 167 Cal. App. 4th 322 case. One place where who's first counts is recording real estate liens on properties that sell with extra equity, most of the time, the first judgment creditor to record a lien wins. As I.R.C. 6323 explains: "first in time, first in right". Exceptions can occur, especially in a bankruptcy court. For a common creditor lien to outrank an IRS lien the lien needs to be recorded before the IRS records their lien, and also be a "Choate" lien; which means it is a final lien situation, and the lien lists specifically what's attached. Remember that the IRS can move ahead of an existing typical judgment owner levy. One example would be if you've got an ongoing employment levy going, the IRS can step in and your levy will be put on hold, until the IRS is satisfied. Sometimes the IRS can bend laws and rules to get paid, check out http://www.lerchearly.com/publications/779-the-irs-may-priority-over-secured-lenders-tax-lien-levy-cases. Another circumstance when common judgment creditors get burned is in a bankruptcy court. Legal fees, Trustee's fees, taxes, and other stuff is usually paid ahead of your long-held property lien position. In bankruptcy court, the big boys get theirs first. Mark Shapiro of: http://www.JudgmentBuy.com - Your fastest and easiest free way to find the right professional to buy or recover a judgment.
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lien priorities, creditor priorities, federal liens, priority of liens, liens with priority,
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