(a) If the secured party or lienholder does not file a third-party claim with the levying officer pursuant to Chapter 3 (commencing with Section 720. 210) within 30 days after service of the demand, the secured party or lienholder shall be deemed to have waived any priority the security interest or lien may have over the creditor's lien on the personal property levied upon and the property may be applied toward the satisfaction of the judgment free of the security interest or lien.
§ 720.550.Waiver of Priority of Security Interest Or Lien
Title 9. Enforcement of Judgments · Division 4 · Chapter 5. Creditor's Demand for Third-Party Claim by Secured Party or Lienholder · Enacted 1982 · no amendments on record · Last verified July 28, 2026
In one sentenceSection 720.550 provides that a secured party or lienholder who misses the 30-day deadline for filing a third-party claim waives any priority over the creditor's lien, letting the property be applied to the judgment free of that interest, though priority is restored if the creditor's lien is later released.
Full Text of § 720.550
(b) If the secured party or lienholder is deemed to have waived any priority over the creditor's lien pursuant to subdivision (a) and the creditor's lien on the personal property is released, the security interest or lien is restored to its former position of priority.
Plain-English Summary
This section delivers the consequence § 720.530's notice warns about. If the secured party or lienholder doesn't file a third-party claim under Chapter 3 (§ 720.210) within 30 days after service of the demand, the law treats that silence as a waiver of any priority the security interest or lien held over the creditor's lien on the property. Once waived, the property can be applied toward satisfying the judgment free of the secured party's claim.
Subdivision (b) softens that outcome in one specific circumstance. If priority is waived under subdivision (a) but the creditor's own lien on the property is later released, the security interest or lien snaps back to its original position of priority. The waiver, in other words, only displaces the secured interest while the creditor's lien is actively being enforced against the property — it doesn't permanently erase the secured party's rights if the creditor's claim to that property falls away.
Frequently Asked Questions
What happens if a secured party never responds to the demand?
The secured party or lienholder is deemed to have waived any priority the security interest or lien had over the creditor's lien, and the property may be applied toward the judgment free of that interest.
Is the waiver permanent?
Not always. Section 720.550(b) restores the security interest or lien to its former priority if the creditor's lien on the property is later released.
What has the secured party lost by not filing a timely third-party claim?
Priority over the creditor's lien on the property levied upon — not necessarily the underlying debt or every possible recovery, since § 701.810 may still allow a share of excess sale proceeds.
Amendment History
Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
Also known as: waiver of lien priority failure to file third party claimconsequence of not responding to creditor demand