How Judgment Creditors Get Information About Your Income and Property

When a creditor gets a money judgment against you, that creditor will often want to find out what income and assets you have so that it can start collecting on the judgment—called "enforcing the judgment." What procedures judgment creditors can use to get information from you vary by state, but the most common are:

• debtor's examinations
• written questions, and
• scheduling a court hearing where the creditor questions you under penalty of perjury about your income and property.

Once the judgment creditor has information about the property you own and the money you earn, it can begin collection procedures. (To learn about the different methods judgment creditors can use to collect, see How Creditors Enforce Judgments.)

Debtor's Examinations

Most states let a judgment creditor question you about your property and finances, in a procedure called a "debtor's examination." Basically, the judgment creditor is looking for money or property that can be legally taken to pay the debt. High on the list of property the creditor looks for are deposit accounts (like savings, checking, certificate of deposit, and money market), tax refunds due, and other easy cash. Don't lie. Your statements are ordinarily given under penalty of perjury.

Written Questions

In some states, a judgment creditor sends you a form and asks you to fill it out, listing your employer's name and address, your assets, and other financial information. You must do this under penalty of perjury. If you don't comply or the judgment creditor believes you're lying or not disclosing all relevant information, the judgment creditor can ask the court to issue an order requiring you to come to court and answer the questions.

Court Appearance

In other states, the creditor serves you with a document ordering you to show up in court and bring certain financial documents, such as bank statements or pay stubs. You may be sent the questions and given a chance to answer them in writing first. If you receive an order to appear in court and you don't show up, the court can declare you in contempt and issue a warrant for your arrest.

Liens and Warrants

In a few states, if the judge issues an order for you to come to court, serving that order on you creates a lien on your personal property. The lien may make it difficult for you to sell the property without first paying the judgment. Also, in some states if the judgment creditor believes you are about to leave the state or conceal your property to avoid paying the judgment, the creditor can ask the judge to issue a warrant for your immediate arrest. This is quite drastic, but it's been known to happen when a lot of money is owed.

What to Do If You Can't Make the Court Hearing

If you receive an order to appear but can't take the time off from work or otherwise can't make it, call the judgment creditor or the lawyer and explain your situation. Explain that you're willing to answer questions over the phone or even in person, but at another time. If the creditor thinks you're telling the truth and hasn't already sent you a form about your finances and property, the creditor may take the information over the telephone.

If the judgment creditor agrees to change the date or to let you answer the questions over the phone, ask for a letter to you and the court verifying that you need not appear at the hearing. If the creditor won't write the letter, write your own letter confirming your conversation. Send it to the creditor and to the court.

Attending the Court Hearing

If you can attend the hearing, or you reschedule it to a convenient time, do not take any money or expensive personal items with you. The judgment creditor might ask you to empty your pockets or purse and ask the court to order you to turn over any nonexempt money or valuable personal property in your possession, like a college ring or leather jacket.

For information about creditors suing to collect for nonpayment, including the lawsuit process, possible debtor defenses, and more, see our Creditor Lawsuits area.