There was an old saying that ‘information equals power’. It’s definitely true in civil litigation, especially when it comes to post-judgment enforcement. Consider enforcing a money judgment. Enforcement is essentially collecting payment. Information is crucial to getting it done.
What kind of information? Information about the judgment debtor’s income and assets. A judgment creditor needs to know about the debtor’s:
- employment and weekly income
- current debt load
- bank accounts, including savings and checking
- money market and other accounts
- real property (other than a primary residence)
- cars, boats, RVs, etc.
- jewelry, collectibles, etc.
The most important information to a judgment creditor pertains to the debtor’s assets. Assets equal leverage for enforcement purposes. So a creditor needs to know as much about debtor assets as possible.
A Creditor Starts by Asking
In most states, the first and most utilized method of gleaning information is simply asking. The creditor will send a series of written questions pertaining to income and assets, questions the debtor is compelled to answer truthfully and fully. Questions are asked and answered through the two parties’ attorneys.
This process is known in most states as ‘interrogatories’. A small number of states dispense with interrogatories in favor of legal depositions or answering the questions in court. In those states with an interrogatory process, a failure to cooperate could mean a contempt ruling against the debtor and subsequent arrest to force an appearance in court.
Independent Asset Research
Smart judgment creditors know that interrogatories seldom yield answers that tell the whole story. Debtors have a habit of holding back important information. So more often than not, creditors or their representatives need to conduct post-judgment asset research on their own.
Judgment Collectors is a Utah collection agency specializing in money judgments. Independent asset searches are part and parcel with their business. They say a good researcher can use a combination of public records, proprietary databases, and social media properties to learn all they need to know about debtors and their assets.
For example, did you know that all real estate transactions are a matter of public record? By searching county property records, an agency like Judgment Collectors could pretty quickly find real estate a judgment creditor has purposely chosen not to reveal during interrogatories.
Assets Equal Leverage to the Creditor
At this point you might be wondering why any of what you read matters to judgment enforcement. It comes down to this simple fact: assets equal leverage. Let us go back to Judgment Collectors. They once worked on a case involving a debtor reluctant to pay and claiming he had no real property other than his primary residence.
A property search revealed an airplane hangar the debtor owned in a neighboring county. Once the debtor knew Judgment Collectors were on to him, he suddenly found a way to pay what I owed. But why?
Because real property is subject to judgment liens. A lien would tie the debtor’s hands in terms of refinancing, selling, or transferring the property to someone else. If a lien didn’t do the trick, the property was also subject to a writ of execution. That means it could have been seized and sold to pay his debt. That’s a fairly strong motivation find some other way to pay.
Without information about income and assets, a judgment creditor simply needs to take the debtor’s word for it. That puts a creditor in a bad position for enforcement purposes. The creditor wants to be in the dominant position so that he controls the situation. But for that to happen, the creditor needs information. And now you know.