After a judge grants an order (also known as a judgment) for money damages, it is the creditor’s responsibility to collect on it. When attempting to collect on an outstanding judgment, a creditor must follow certain procedures if they want to try and seize the judgment debtor’s assets. Part of this process includes determining the type of assets the judgment debtor has. It also requires the creditor to decide which legal tools would be most successful to ultimately getting the judgment paid. Read on to learn more about California’s judgment debtor examination and how it is used in the judgment collection process.
What is a Judgment Debtor Examination?
A judgment debtor examination helps judgment creditors find what assets the debtor has and how they can collect their judgment by seizing those assets. It is a special proceeding used by a judgment creditor. The judgment debtor examination can be used to find where the judgment debtor works, where they have bank accounts, and what other assets they might own.
At the debtor’s exam, the judgment debtor must answer questions under oath about his/her finances. The judgment debtor must also answer questions about his/her ability to pay the judgment owed. If a request to produce records was served with the judgment t debtor examination notice, they must also produce records about their assets. There are a multitude of questions that a judgment creditor should ask at a judgment debtor exam. At minimum, a judgment creditor should ask questions about the following items:
- The type of assets the judgment debtor owns
- The debts the judgment debtor owes and to who
- The judgment debtor’s employment information
- All sources of income the judgment debtor receives
During a judgment debtor examination, the judgment debtor may attempt to negotiate a settlement with the judgment creditor. It should be noted, however, that the judgment-debtor must appear at the debtor’s exam or face possible jail time. If a debtor does not appear at the judgment debtor examination, the court will usually issue a bench warrant against the debtor. A bench warrant is an order issued by a judge that authorizing a person’s arrest, this making the matter criminal.
When scheduling a judgment debtor examination, a judgment creditor typically completes the following documents:
- Application and Order for Appearance and Examination
- Subpoena and Declaration re Production of Documents
- Writ of Execution
- Abstract of Judgment (depends on the asset being seized)
- Memorandum of Costs After Judgment
The debtor creditor must wait 30 days after the entry of a Judgment before they can set a judgment debtor examination. Keep in mind, a creditor is limited to setting a judgment debtor exam every 120 days without obtaining special approval from the court. Contact A People’s Choice for more information about how to set and properly prepare for a judgment debtor examination.
If you have an unpaid judgment and the debtor is refusing the settle the debt, you may be able to get an order for a levy and seize the debtor’s assets to pay the outstanding monies and interest owed on the judgment. There are several different ways to levy on assets including:
- Bank account levy
- Vehicle levy
- Till tap levy
- Keeper levy
- Wage garnishment
Physical assets can be seized by the sheriff and sold. After assets are seized, the sale proceeds can then be transferred to the judgment creditor to satisfy the judgment. Keep in mind, a judgment is good for 10 years. However, a judgment may be subsequently renewed for another ten years if an extension is filed timely.
The judgment creditor may run into difficulties if a judgment debtor files for bankruptcy. Upon filing for bankruptcy, an automatic stay is put in place which, in effect, prohibits the judgment creditor from enforcing collection efforts. A creditor should immediately file a Proof of Claim with the court and may want to seek legal advice to see if they have other courses of action available. Also, the judgment creditor can challenge any claims for debt discharge with the bankruptcy court.
Contact A People’s Choice for legal document preparation help to set a judgment debtor examination and collect your judgment. If the judgment debtor passes away, you may have to file a claim against his/her estate to collect the judgment.
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