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ABC Loans Ltd. successfully sued Brian Dooley and obtained a judgment for $150,000 after Dooley failed to repay a loan. The value of all of Dooley’s assets is only about $100,000. Which statement best describes the steps ABC Loans can now take against Dooley?

Options:
1. ABC Loans can seize all of Dooley's assets and apply the proceeds toward the judgment.
2. ABC Loans cannot seize Dooley's assets but can garnish his bank account.
3. ABC Loans will be limited in its ability to seize Dooley's assets because some assets may be exempt from seizure to ensure Dooley is not left destitute.
4. ABC Loans will be able to apply to a public fund in the event that Dooley is unable to pay the entire judgment.

Answer :

In this scenario, ABC Loans Ltd. has obtained a legal judgment against Brian Dooley for $150,000. However, Dooley's total assets amount to only $100,000. The question is regarding the steps ABC Loans can take to collect the judgment amount.

Let's evaluate the options given:

  1. ABC Loans can seize all of Dooley's assets and apply the proceeds toward the judgment.

    This option seems straightforward but is not entirely feasible because the law generally protects certain assets from being seized to ensure that the debtor is not left completely destitute.

  2. ABC Loans cannot seize Dooley's assets but can garnish his bank account.

    While garnishment of wages or bank accounts is a possibility, this option alone does not address the asset seizure which can happen under certain conditions. However, there are limitations, such as exemptions and the debtor's ability to contest garnishment.

  3. ABC Loans will be limited in its ability to seize Dooley's assets because some assets may be exempt from seizure to ensure Dooley is not left destitute.

    This is the most accurate statement. Many jurisdictions provide legal protections for certain essential assets, meaning ABC Loans can attempt to seize and sell non-exempt assets to satisfy some of the judgment. However, essential belongings like basic household goods and a reasonable amount of equity in a primary residence might be protected.

  4. ABC Loans will be able to apply to a public fund in the event that Dooley is unable to pay the entire judgment.

    This option is incorrect as there is typically no public fund for satisfying private civil judgments.

Conclusion: The correct and most reasonable option is Option 3. ABC Loans will likely be limited in its ability to seize Dooley’s assets due to potential exemptions protecting Dooley from becoming destitute, allowing them only to pursue available and non-exempt assets. They may also pursue other collection methods like garnishing wages or bank accounts to try and recover the owed amount.

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