§ 720.260.Undertaking Timely Filed By Creditor

Title 9. Enforcement of Judgments · Division 4 · Chapter 3. Third-Party Claim of Security Interest or Lien · Last amended 2002 · Last verified July 28, 2026

In one sentenceSection 720.260 lets the creditor keep the levy moving by filing an undertaking that indemnifies the lienholder and is conditioned on a final judgment of priority, sized at ten thousand dollars or twice the lien amount, whichever is less, unless the creditor chooses a larger figure, with the property passing free of the lienholder's claim once sold, paid, or delivered under that undertaking.

Full Text of § 720.260

Text sizeJump to: (a) (b) (c) (d)

(a) If the creditor within the time allowed under subdivision (b) of Section 720.240 either files with the levying officer an undertaking that satisfies the requirements of this section and a statement that satisfies the requirements of Section 720.280 or makes a deposit with the levying officer of the amount claimed under Section 720.230:

(1) The levying officer shall execute the writ in the manner provided by law unless, in a case where the creditor has filed an undertaking, the secured party or lienholder files an undertaking to release the property pursuant to Chapter 6 (commencing with Section 720.610).

(2) After sale, payment, or delivery of the property pursuant to the writ, the property is free of all claims or liens of the secured party or lienholder for which the creditor has given the undertaking or made the deposit.

(b) Subject to Sections 720.770 and 996.010, unless the creditor elects to file an undertaking in a larger amount, the amount of the undertaking filed by the creditor under this section shall be in the amount of ten thousand dollars ($10,000) or twice the amount of the execution lien as of the date of levy or other enforcement lien as of the date it was created, whichever is the lesser amount.

(1) Be made in favor of the secured party or lienholder.

(2) Indemnify the secured party or lienholder against any loss, liability, damages, costs, and attorney's fees, incurred by reason of the enforcement proceedings.

(3) Be conditioned on a final judgment that the security interest or lien of the third person is entitled to priority over the creditor's lien.

(d) If the creditor is a public entity exempt from giving an undertaking, the public entity shall, in lieu of filing the undertaking, file with the levying officer a notice stating that the public entity opposes the claim of the third person. When so filed, the notice is deemed to satisfy the requirement of this section that an undertaking be filed.

End

Plain-English Summary

This section gives the creditor a way to push the enforcement forward instead of waiting out the lienholder's claim. If, within the ten days § 720.240 allows, the creditor files an undertaking meeting this section's requirements -- plus the statement § 720.280 requires -- or deposits the amount claimed, the levying officer executes the writ as the law otherwise provides. The one exception: if the lienholder has also filed an undertaking to release the property under Chapter 6 (§ 720.610), that undertaking controls instead.

Subdivision (b) sets the undertaking's size at ten thousand dollars or twice the amount of the execution lien (or other enforcement lien), whichever is less, unless the creditor elects to post more -- all subject to the objection procedure in § 720.770 and the general undertaking rules in § 996.010. Subdivision (c) spells out what the undertaking must do: run in favor of the secured party or lienholder, indemnify against loss, liability, damages, costs, and attorney's fees from the enforcement proceedings, and be conditioned on a final judgment that the third person's interest has priority over the creditor's lien.

Once the property is sold, the proceeds paid, or possession delivered under an undertaking or deposit given this way, subdivision (a)(2) makes the property free of the lienholder's claim to the extent covered. Subdivision (d) gives a public entity creditor exempt from undertakings an alternative: file a notice opposing the claim, which the statute treats as satisfying the undertaking requirement.

Frequently Asked Questions

How does a creditor keep the levy moving despite a lienholder's third-party claim?

By filing an undertaking meeting § 720.260's requirements along with the statement required by § 720.280, or by depositing the amount claimed under § 720.230.

How much must the creditor's undertaking be?

Ten thousand dollars or twice the amount of the execution lien as of the levy (or other enforcement lien as of its creation), whichever is less -- unless the creditor chooses to post a larger undertaking.

What must the undertaking accomplish?

It must run in favor of the secured party or lienholder, indemnify that party against loss, liability, damages, costs, and attorney's fees from the enforcement proceedings, and be conditioned on a final judgment that the third person's interest has priority over the creditor's lien.

What happens to the property once it's sold or delivered under the undertaking?

It passes free of the claims or liens of the secured party or lienholder for which the creditor gave the undertaking or made the deposit.

Can a public entity creditor avoid posting an undertaking?

Yes. Section 720.260(d) lets an exempt public entity file a notice opposing the claim instead, which satisfies the undertaking requirement.

Amendment History

Amended by Stats 2001 ch 812 (AB 223), s 6, eff. 1/1/2002.

Source & verification. Section text is reproduced verbatim from the California Legislative Information. Enacted by the California Legislature. Last verified July 28, 2026. · Official source

Also known as: creditor undertaking third party claim californiaamount of undertaking lien claim