Third-party Claims and Related ProceduresThird-party Claim of Security Interest Or Lien
Section § 720.210
If someone else's personal property has been seized because of a debt, someone who has a stronger claim, like a security interest or lien on that property, can file a claim to protect their rights. This also applies to fixtures, which are things attached to buildings, if they have a stronger claim to those too.
Section § 720.220
If you want to claim personal property that someone else has seized, you need to notify the officer who took it, filing your claim before they sell it, hand it over to the creditor, or give the money to the creditor.
Section § 720.230
If you're claiming a right to someone's property because you have a security interest or lien, you must file it formally. This claim must be sworn to under oath and include key details like the name and address of the secured party, a description of the property, the specifics of your security interest or lien with facts supporting it, and the total amount owed. Also, you need to attach any supporting documents, such as a security agreement or lien writing, to the claim. If you don't attach these documents, the court might not consider them during a hearing.
Section § 720.240
This section explains the steps a levying officer must take when a third-party claim is filed on levied property. Within five days, they must inform the creditor about the claim, whether the third party has posted a bond to release the property, and the creditor's options to object. If the third party hasn't posted a bond, the creditor can submit their own bond or deposit the claimed amount with interest. The creditor has ten days to respond. The levying officer also has to inform the debtor and can do so even if there are minor issues with the claim paperwork.
Section § 720.250
If someone files a claim on property that's been seized because they have a security interest or lien, the officer in charge can't sell the property, give it to the creditor, or pay the creditor with any money made from it. Also, even if the person with the security interest or lien doesn't file a claim, their interest in the property isn't affected.
Section § 720.260
This section discusses the procedures a creditor must follow to move ahead with enforcing a court order when a third party has a claim on the property. The creditor can either give a guarantee (called an undertaking) or deposit money with the officer taking action. If they do this, the officer will carry out the writ. After the property is handled, it's free from claims by the original lienholder. The undertaking must be for $10,000 or slightly more, depending on the situation. It protects the original lienholder from losses if their claim ends up having priority. If the creditor is a government entity, they can file a notice instead of a financial guarantee to oppose the third party's claim.
Section § 720.270
If someone or an entity has a claim on property being seized by a levying officer, they need to take action to either support their claim with a proper undertaking or deposit the claimed amount. If the creditor fails to do this within a certain timeframe, the officer will release the property unless there are other court orders or liens. Property released back to a debtor needs to be claimed promptly, or it could go to another party making a claim. Even if the property is released, disputes involving third parties can still be heard in court.
Section § 720.280
If a creditor wants to challenge a secured party's claim on a debtor's property, they must first file a document with the officer in charge, declaring under oath why the secured party's claim is invalid or why it shouldn't take priority over their own. They also have to send this document to both the secured party and the debtor, either in person or by mail.
Section § 720.290
This law section explains what happens when a creditor deposits money with a court officer (levying officer) to cover a third-party claim on property. If the deposit is enough, and the creditor has used a valid payment method, the officer gives the money to the secured party or lienholder, unless the check has not cleared yet. If the secured party or lienholder accepts this money, their interest in the property passes to the creditor, who then gains rights to proceeds from the property sale. If the money is refused, the deposit is sent to the county treasurer for the benefit of the lienholder or secured party.