If a creditor gets a judgment against you, it will then take steps to collect on that judgment. The creditor can collect by garnishing your wages, or selling some of your assets or property. Before the judgment creditor does this, it must first find out whether you are employed, how much money you make, and what assets you own. The creditor has three primary ways to obtain this information from you:
The creditor is likely to use all three of these methods if you do not pay the judgment, usually in the order described below. (Judgment creditors can use other means to collect against you as well. To learn more, see How Creditors Enforce Judgments.)
Usually, the creditor's first step is to serve you with written questions about your assets. These written questions are often referred to as interrogatories and will be accompanied by written definitions and instructions. Follow the instructions carefully. They will specify when your answers are due and where to send them.
The creditor will ask you questions about things such as:
You must answer the questions to the best of your ability, and within the time stated in the papers. When you have completely answered the questions, you will serve your responses on the creditor or its attorney. You should serve your answers by mail to the address listed in the requests. If you don’t do so, you may be held in contempt of court.
If you feel a question is not relevant to getting information about your assets, you can object to the request. For example, if the creditor asks you about your spouse’s income or assets owned only by your spouse, you may want to object.
If you and the creditor cannot agree on whether you must answer the question, the judge will decide if you have to answer. You'll have to provide the judge with a good reason as to why you should not have to answer. If you feel strongly that a question is inappropriate and answering it can create problems for you, you should consult with an attorney.
If the creditor wants to conduct a debtor’s exam, it must first file papers in court requesting permission to do so. The court will almost always approve the creditor’s request.
Once the judge approves the request, you will be served with a summons to appear in court and a document titled Order for Examination and Notice of Hearing, or something similar. In some states, you will also be served with a document that requires you to list all of your assets. If you receive this document, you must fill it out completely. The Order for Examination is a court order, and violating it is considered contempt of court.
The examination will usually take place in court, but in some states it will take place at an attorney’s office. Unless you have a lot of assets, the examination itself usually takes less than 30 minutes. The creditor or its attorney will ask you questions. A court reporter will be present to transcribe the proceedings. You will be under oath and must answer the questions truthfully. If the creditor later finds out that you have been less than truthful, you may be found in contempt of court.
You have the right to object to any question you believe is inappropriate. A judge or magistrate will likely rule on your objection during the examination, and you won’t have time to consult with an attorney.
TIP. Don't bring anything of value with you to the examination. An experienced creditor’s attorney will ask the judge to order you to turn over any cash, jewelry, or other valuables you may have with you. If you cannot prove the property is exempt from attachment, the judge may order you to give it to your creditor.
The creditor may request that you provide it with documents. Instructions will specify when your answers are due and where you should send them. A creditor will often ask you to bring the documents to the debtor’s exam.
Examples of documents the creditor is likely to ask for include:
You have the right to object to any request you believe is inappropriate. As with objections to written questions, the judge will decide if you have to answer, but it will be up to you to provide the judge with a good reason why you have objected. If you feel strongly that a question is inappropriate and answering it can create problems for you, you should consult with an attorney.
If you do not produce the requested documents in the manner called for in the instructions, you can be held in contempt of court.