Courts award civil judgments to creditors after they win debt collection lawsuits against consumers. After the court finalizes the judgment -- a process which can take up to 30 days, depending on the state -- the creditor and debtor become the “judgment creditor” and “judgment debtor,” respectively. If the judgment debtor does not make payment arrangements with the creditor or the court, some states allow judgment creditors to request a judgment debtor examination.
Judgment Debtor Exams
When a creditor files a judgment debtor exam, it sends the debtor a summons notifying him that he must appear in court and disclose financial information related to his income and assets. Doing so provides the creditor with information it needs to file the correct court paperwork to collect its debt via garnishment or property liens.
A judgment debtor examination is a formal court process. Because of this, the creditor must send the debtor a summons requiring his appearance in court. Should the debtor ignore the summons and not appear at the judgment debtor examination, he is in contempt of court and can be arrested.
When Interrogations Occur
Although major creditors, such as credit card companies and collection agencies, sometimes file requests for post-judgment interrogations, these examinations most often occur in cases where the judgment creditor and judgment debtor reside in the same area. This is because the judgment creditor or its legal representation must also appear in court to conduct the examination. If a creditor has no knowledge of a debtor’s assets, travel costs and filing fees may prove cost-prohibitive.
The phrase “judgment-proof debtor” is misleading to some consumers. A creditor can sue and obtain a judgment against any debtor. A judgment-proof debtor, however, has no assets with which to pay the debt or that the creditor can legally seize. An example of a judgment-proof debtor is an individual who rents her home, owns no car and lives solely on Social Security payments. The creditor cannot place liens on the consumer’s home or vehicle because she owns neither. The creditor also cannot garnish Social Security payments from the Social Security Administration or the debtor’s bank account, as government benefits are exempt from commercial creditors.
While a creditor can win a civil judgment against a judgment-proof debtor, it cannot enforce the judgment. Judgment-proof debtors, for this reason, have little to fear from judgment debtor examinations.
Alternatives for Creditors
While creditors cannot harass an individual’s friends and family members about his debt, a judgment creditor can use information obtained through a third-party during the judgment recovery process. Because of this, judgment creditors often employ methods such as skip-tracing and public records searches following a lawsuit. This allows the company to uncover the information it needs without filing for a judgment debtor exam.
- Weltman, Weinberg & Reis Co., L.P.A.: Debtor’s Exams: In and Out of Court; Andrew Voorhees; 2008
- California Department of Consumer Affairs: After the Judgment -– Collecting or Satisfying the Judgment
- U.S. Department of the Treasury: Answers About Garnishments
- Lawyers.com; What It Means to Be Judgment-Proof; 2010
Ciele Edwards holds a Bachelor of Arts in English and has been a consumer advocate and credit specialist for more than 10 years. She currently works in the real-estate industry as a consumer credit and debt specialist. Edwards has experience working with collections, liens, judgments, bankruptcies, loans and credit law.