Michael T. Chulak and Associates represents homeowner associations throughout California in collecting delinquent assessments. No initial fee or deposit is required. While our collection procedures rarely require us to proceed to foreclosure, our firm uses the judicial foreclosure process exclusively when it becomes necessary. Only a law firm can foreclose judicially. Lien services may not use the courts and are required to foreclose non-judicially. We believe the judicial foreclosure process is superior because a deficiency judgment is possible to obtain and a lawsuit tends to force the debtor into an early resolution. See our No Initial Fee Assessment Collections.

Judicial Foreclosure

Nonjudicial Foreclosure

Remedy:
After recording an assessment lien, association files a complaint and obtains an order for sale and money judgment.  The judgment can be collected by sale of the home, wage garnishment, bank account levy, rent levy or other methods.

Remedy:
After recording an assessment lien, association records a Notice of Default.  Private trustee sells the home by trustee’s sale at a public auction.

Time:
After recording the Notice of Default, the trustee's sale takes approximately four additional months.  If the debtor obtains a temporary restraining order, the matter will be set for a hearing. The average additional delay is six weeks.

Advantages:
Maximizes the opportunity to collect from all available resources of debtor.  These matters almost never go to trial.  Procedure allows time for negotiations, stipulated payment plans and/or sale of the property.  Other methods of collection are also available.  Deficiency judgment is available.  Judgment will generally prevent debtor from buying another home until debt is fully paid.

Advantages:
Sometimes the debtor will pay or agree to a payment plan after the recording of the Notice of Default.  This may save some costs for the debtor.

Disadvantages:
It may be necessary for the association to keep the first trust deed current during the process.

Disadvantages:
Recovery is limited to the sale of the home, thus nonjudicial foreclosure makes sense only if there is sufficient equity in the debtor's property.  Deficiencies are not available.  Sometimes it is difficult for a subsequent buyer to obtain title insurance.  It may be necessary to evict the debtor, resulting in additional costs and delay.  It may be necessary for the association to keep the first trust deed lender current during the process.

Small Claims Court

Superior Court Suit

Remedy:
Association files a complaint and obtains a money judgment which is collectible as with other judgments.  Court appearances require a member of the association to attend.  Attorney may not appear for association except in appeals.

Remedy:
Association files a complaint and obtains a money judgment which is collectible as with other judgments.  Association is represented by attorney.

Time:
Obtaining a judgment takes one to two months depending on court's calendar and ability to serve debtor.

Time:
Obtaining a judgment takes approximately one year depending on the court's calendar and ability to serve debtor.

Advantages:
Quick and inexpensive.  Judgment can be collected by wage garnishment, bank account levy, rent levy or other methods.

Advantages:
Debtors generally require a lawyer to respond to such suits.  This creates pressure to pay or enter into a stipulated payment plan.  Unlike small claims court, the claim permitted is unlimited in amount.  Judgment can be collected by wage garnishment, bank account levy, rent levy or other methods.

Disadvantages:
Associations are limited to two claims which exceed $2,500 each year.  Maximum judgment is $7,500.   Association must represent itself and is generally given only seven to eight minutes to argue its case.  Attorney may not represent association except in appeals.  Most losing debtors appeal their cases to Superior Court causing delay and additional costs.  Judgments cannot be collected by foreclosure sale.

Disadvantages:
More expensive than small claims court. Also takes longer to get to trial.  Judgment cannot be collected by foreclosure sale.