What is Domestication of a Debt?
Oftentimes when people are owed money, they begin to research all of the options available to them and one of the keywords that comes up frequently is Domestication of a debt. You may have also come across other terms such as sister state judgment. To make sure that you are most informed the following article clarifies exactly what a domestication of a debt is and how it relates to the debt collection process.
Domestication of a debt refers to the process of getting a California court to recognize and enforce an out-of-state judgment or sister-state judgment or those from foreign countries.
Any judgment from another US state is recognized or entitled at least to “full faith and credit” according to the US Constitution. This means that if the judgment is rendered by a court with subject matter jurisdiction, the parties cannot re-litigate the same issues, though the judgment debtor can move to vacate the judgment on other grounds.
Domestication is essentially transferring the foreign judgment to the California courts so that the judgment creditor can undertake collection activities in California.
To domesticate a debt, you must follow the procedures found in the California Code of Civil Procedure 1710.10, also called the Sister State and Foreign Money Judgment Act. Other sections of the Code need to be followed to establish the judgment.
The procedures to domesticate a debt include:
- Obtaining and filing an authenticated copy of the sister-state judgment
- File an Application for Entry of Judgment on Sister-State Judgment
- Obtain a Notice of Entry of Judgment on Sister-State Judgment
Once you serve the judgment, it becomes enforceable though the debtor has 30 days to challenge the judgment by serving a motion to vacate the judgment based upon the following:
- The sister state lacked personal or subject matter jurisdiction over the debtor
- There is an appeal pending in the sister state
- The sister state granted a stay of enforcement
- Another motion to vacate is pending in the sister state.
If all of this sounds somewhat confusing it is because it can be for someone who does not do this regularly. Consequently, my firm has been handling these issues for well over 30 years and if you have any questions related to this article or need help with any debt collection matter do not hesitate to contact me.