Winning a money judgment triggers a collection process that often requires what is known as post-judgment debtor discovery. Discovery is about learning the details of a judgment debtor’s income and assets. As you might expect, debtors are not always willing to offer the information voluntarily.
A judgment creditor or his attorney could send a letter asking the debtor to disclose income and assets. Letters rarely work when creditors are dealing with uncooperative debtors. So there are other ways to get the information.
Judgment Collectors is a Utah collection agency that specializes in money judgments. They say that the means of post-judgment discovery differ between the states. As a general rule, here are five strategies judgment creditors usually have access to.
1. Interrogatories and Requests for Production
Both interrogatories and requests for production (RFP) are court-sanctioned processes. Judgment debtors are compelled to cooperate. They also agree to answer under oath. The basics of each process are as follows:
- Interrogatories – Debtors are compelled to disclose specific and detailed information in response to written questions submitted by the creditor’s attorney. Examples include employer names and addresses, bank account names, addresses, and account numbers, and information about any and all real property.
- Requests for Production – RFPs are essentially requests for supporting documentation. The documentation verifies the answers provided through interrogatories. Examples include pay stubs, bank statements, tax returns, and real estate deeds.
Failure to cooperate with either process could lead to court sanctions. Some states even allow courts to issue warrants compelling local authorities to arrest offending parties and bring them in for questioning.
2. Judgment Debtor Examination
A judgment debtor examination is an oral deposition. The debtor is ordered by the court to appear at an attorney’s office or the court itself to answer questions under oath. An oral deposition is often used after interrogatories in hopes of getting more detailed information not provided by the debtor’s evasive written answers.
3. Third-Party Subpoenas
Judgment creditors can use third-party subpoenas to get information a debtor doesn’t voluntarily offer. Targets include banks and credit unions, financial advisors, business partners, and employers. These third parties are compelled to respond to subpoenas truthfully and in a timely manner.
4. Asset Searches
Next are asset searches. A creditor or his representative searches for a combination of public records and private databases looking for anything that might indicate the existence of unreported income or assets. For example, Judgment Collectors might scour property records hoping to find a piece of real property a debtor has tried to conceal.
Judgment Collectors once worked on a case during which their asset search turned up an airplane hangar in a neighboring county. Once they inform the debtor that they knew of the property, the debtor determined it was in his best interest to pay what he owed.
Skilled investigators also look at social media. They can glean interesting and important clues that point them to other public records they should be looking at. Social media is a treasure trove of information to someone who knows how to use it.
5. Abstracting Judgment Liens
Filing and abstracting judgment liens is an enforcement procedure. But abstracting requires the public disclosure of certain types of information. So by filing a lien on one piece of property, a creditor could actually learn about another.
Although collection is often harder on the creditor than the debtor, creditors are not left without tools to do the job. They have access to a variety of means for discovering debtor income and assets, means that can lead them directly to assets that virtually guarantee they will get paid.
