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Judgment Debtor Examinations

Orange County Judgment Debtor Examination Lawyer

Judgment Debtor Examinations as a Business Collection Tool

innerJudgment creditors have the right to take “judgment debtor examinations” of the debtor, as well as third parties, to ask broad questions regarding the debtor’s assets and liabilities.  These examinations allow the creditor to learn about the extent and location of the debtor’s assets.  Debtor examinations can be highly effective at bringing the debtor to the table and discovering valuable assets to pursue.  Every creditor should request and schedule a debtor examination.

 

Need Help Conducting a Judgment Debtor Examination in California?

Judgment debtor examinations can be very effective, if the creditor asks the right questions and immediately takes the necessary follow up steps.  Our firm is able to quickly schedule and conduct judgment debtor examinations in Orange County and throughout California, at which we learn the extent of the debtors’ assets and collect from such assets.  Please contact us at (949) 203-3870 for a complimentary analysis of your judgment and collection options.

 

How to Collect Judgments via Judgment Debtor Examinations:

  1. To obtain a debtor examination, the creditor must file an Application and Order for Appearance and Examination.
  2. The court will then schedule the examination for a specific date and time, and issue an order requiring the debtor’s appearance.  See CCP § 708.110(b).
  3. The creditor must then personally serve the debtor with the examination order, which can sometimes be difficult or expensive.  See CCP § 708.110(b).  If the order is properly served, the debtor must appear at the scheduled date and time for examination.
  4. After the order has been served, the creditor must file a Proof of Service with the court.
  5. At the examination, the debtor is sworn in by the judge, during which the debtor agrees to answer the creditor’s questions under penalty of perjury.  The “under oath” aspect of a debtor examination can be very helpful to a creditor in potential future bankruptcy proceedings.  See below.
  6. During the examination, the creditor is given wide latitude to ask the debtor questions regarding the location, nature and extent of the debtor’s assets and liabilities.
  7. If the debtor fails to appear for examination, the judge will likely issue a warrant for the debtor’s arrest.

 

The Importance of Turnover Orders

If specific assets are revealed during the examination (e.g., the debtor admits to owning a large brokerage account), the creditor can request that the court immediately issue a Turnover Order requiring the debtor to deliver possession of such assets to the creditor.  We have had success with this in Orange County Superior Court and surrounding courts.  If the judge enters the Turnover Order but the debtor fails to deliver the assets, the creditor can seek to hold the debtor in contempt, in which case a warrant will likely issue for the debtor’s arrest.

Creditors should bring Turnover Orders to all judgment debtor examinations, so that orders can be obtained immediately following the examination.  In addition to turnover orders, the creditor can use the information obtained at the examination to levy on the newly-discovered assets (e.g., if the debtor admits to having an account at Bank of America, the creditor can immediately levy on the account).

 

Examinations of Third Parties

Creditors can also take examinations of third parties with knowledge of the debtor’s assets.  This is an under-utilized and effective tool.  At the examination, the creditor has wide latitude to inquire regarding the debtor’s assets and liabilities.  Many times, the mere scheduling of a third party’s examination is sufficient to bring the debtor to the table, as the involvement of business associates, spouses, and family members can be quite embarrassing and disruptive to the debtor.

 

The Importance of the Debtor’s “Under Oath” Testimony

At judgment debtor examinations, the debtor must answer the creditor’s questions under penalty of perjury.  This means that the debtor’s lies may result in criminal charges.  However, the debtor’s testimony cannot be used in future proceedings unless it has been transcribed by a court reported.  Most courts do not provide court reporters for debtor examinations, but creditors are permitted to bring their own court reporter.  Doing so is highly advisable.

Debtors often file bankruptcy in an attempt to discharge (i.e., wipe out) the creditor’s judgment.  Smart creditors compare the debtor’s testimony at the debtor examination with the debtor’s representations to the bankruptcy court.  If the facts reveal that the debtor lied at the debtor examination, the debtor faces possible criminal charges.  If the debtor lied to the bankruptcy court, the debtor may be denied his discharge, meaning the creditor can continue to collect the judgment post-bankruptcy.

 

Contact The Wallin Firm Today for a Judgment Review

Judgment debtor examinations should be immediately scheduled in virtually all business collection matters.  For judgments in Orange County or elsewhere in California, our firm can schedule examinations quickly, ask the right questions at the examinations, and take the necessary follow up steps to collect.  Please contact us at (949) 203-3870 to begin the process.

 

References &Helpful Links:

http://www.courts.ca.gov/documents/ej125.pdf  (Application and Order for Appearance and Examination)

http://codes.lp.findlaw.com/cacode/CCP/3/2/9/d2/6/2/s708.110