How does an out-of-state MCA judgment reach a San Diego business?
An out of state merchant cash advance judgment can be filed in San Diego Superior Court as a sister state judgment. You have 30 days from service of the notice of entry of judgment to move to vacate the judgment on any ground that would have been a defense, under CCP 1710.40. Most merchant cash advance contracts list New York as the state to file suit in, but the MCA funder cannot levy San Diego bank accounts until the judgment is filed here. Since January 1, 2023, California no longer allows judgments by confession in its superior courts. Read about that in our California business debt settlement guide.
Under San Diego Superior Court Local Rule 1.2.2(E), civil cases, including debt collection actions, from East and South County must be filed in the Hall of Justice, 330 W. Broadway, Room 225. That covers a business in Chula Vista, National City, El Cajon, or La Mesa. Cases against businesses in Oceanside, Carlsbad, Escondido, and San Marcos usually go to the North County Regional Center, 325 S. Melrose Dr., Vista. Claims of $35,000 or less are limited civil cases as defined by Code of Civil Procedure 85. Anything over that is unlimited civil, and small claims tops out at $12,500.
What happens when the San Diego County Sheriff bank levies your business bank account?
Your San Diego business bank account will be frozen as soon as the Sheriff’s civil process unit serves the bank levy, and the bank notifies you afterward. According to the court’s collection guidance, the MCA lender must get a writ of execution, form EJ-130, from the clerk and bring it to the Sheriff to have the bank levy served. The bank levy will only pick up the funds in your account at the time it is served, including deposits not yet cleared, per CCP 700.140. Money that arrives the next day is not subject to the levy unless the MCA lender serves a new one, which matters when timing an offer to the MCA funder.
If you are in the hospitality industry, the Sheriff’s deputy may take the cash and checks in your register, also known as a till tap, or may stay at your business for 4 or 8 hours and collect the money as it comes in, a keeper’s levy. The court notes you can close for the day. Since card sales settle to your bank, this mostly catches cash and checks. If the MCA funder records an abstract of judgment, this will lien any San Diego County real property you own. Your judgment will accrue 10% simple interest until paid.
If you personally guaranteed the advance and your personal account is levied, you can file a claim of exemption within 15 days of being personally served with the notice of levy or 20 days if mailed, per CCP 703.520. Only natural persons can use exemptions, so an LLC or corporation’s account gets none. As of July 1, 2026, you can automatically exempt $2,325.00 of your personal bank account, and the exemptions include $10,950.00 in tools of the trade and $8,625.00 in your car, per the Judicial Council’s exemption table. See how to calculate your homestead exemption in our Los Angeles guide.
How should you vet business debt settlement companies in San Diego using DFPI records?
California began registering debt settlement companies on February 15, 2025, but only for helping consumers. No business debt settlement company can show a DFPI license for MCA work. Any DFPI registration on a company’s website covers its consumer clients, not you. Use the California Financing Law licensee search to check if the “advance” was really a loan, made directly or brokered.
DFPI’s small business rule at 10 CCR 1061, effective October 1, 2023, bars unfair, deceptive, or abusive practices in offering commercial financing or other financial products or services to small businesses principally directed or managed from California with gross receipts of $16 million or less. Brokering credit falls under the small business rule. The settlement company arguably does, too, but it’s up to DFPI.
When you interview providers, you can ask them:
- Did your funder register a judgment with the Superior Court of San Diego? When were you served? You have 30 days from that date to seek to vacate it.
- Does your zip code send the case to the Hall of Justice or the Vista Courthouse?
- Do you know how to file exemptions if the creditor levies your bank account? You only have 15 days if the account is in your own name.
- Did you check DFPI’s Licensee Search for your funder and the broker, if you have one?
- If you are a defense contractor, you should be aware of the Assignment of Claims Act, 31 USC 3727. If your funder is threatening to contact your prime, what can you do?
- What paperwork will you need when you close? You will need a satisfaction of judgment (EJ-100), which the creditor must file within 14 days of full payment. You will also need a release of any recorded abstract of judgment and a release of any levy. If they filed a UCC, your settlement should obligate them to file a termination statement. Once they do, UCC 9-513 says the financing statement will no longer be effective.
The Assignment of Claims Act matters mostly for primes, since an assignment binds the government only after conditions such as written notice to the contracting officer are met. You can also read our article on how to know if a business debt settlement company is legit or a scam.
Frequently Asked Questions
Can the Sheriff come to my restaurant and take cash out of the register?
Yes. After the creditor gets a judgment, a deputy can do a “till tap,” taking the cash and checks out of your register, or a “keeper’s levy,” staying at your business for 4 or 8 hours and taking whatever comes in.
How long do I have to file exemptions after my bank account has been levied on?
You have 15 days after you are personally served with a Notice of Levy to file exemptions, or 20 days if it was mailed. Only individuals can file exemptions, not entities.
Do I need to make sure the business debt settlement company is licensed by DFPI?
There’s no license for business debt settlement in California. DFPI began registering debt settlement companies on February 15, 2025, but it’s for helping consumers.
Can I file a complaint with DFPI against my MCA broker or funder?
Yes, through DFPI’s online portal, by calling 1-866-275-2677, or by mail. They can impose penalties and order restitution but can’t act as your lawyer or resolve contractual disputes.