In civil court, discovery is the process of gathering information and evidence. Discovery occurs prior to trial. It can also occur after the fact. In such cases, it is known as post-judgment discovery.
The point of post-judgment discovery is to give the judgment creditor an opportunity to gather information about debtor income and assets. This information is key to forming a collection strategy. So judgment creditors need complete, accurate, and timely information to move forward.
Post-Judgment Discovery Is Limited
In most states, creditors can ask for comprehensive details regarding a debtor’s business and personal assets. Anything the law says can be leveraged to collect payment is on the table. But there are limits. For instance, creditors aren’t allowed to ask for information that does not directly pertain to income and assets.
Here are examples of what judgment creditors typically want to know and can ask about:
- Income Sources – Creditors are free to ask about any and all sources of income. This includes wages from a standard job, gig work income, business revenue, rental income, distributions, etc.
- Financial Assets – Also up for grabs are financial assets. Creditors can ask about bank accounts, business receivables, business interests, investments, inheritances, etc.
- Real Property – Creditors are able to inquire about real property. They can ask about vacation homes, rental properties, and the like. Along the same lines, they can also inquire about cars, boats, RVs, and so forth.
- Financial Records – Creditors are able to request financial records including tax returns and bank statements. If the judgment debtor is a business, all financial records are up for grabs.
- Property Records – Some creditors want to know about property ownership and any information involving recent asset transfers. Assets sales and gifts are also important to creditors.
- Liabilities – A debtor’s liabilities could play a role in his ability to pay. Therefore, creditors almost always ask for liability information.
In some cases, a creditor may have access to information that may or may not be true. He might request a statement of admission or denial. An admission would consent to the facts being true, while a denial would do just the opposite.
How Post-Judgment Discovery Is Conducted
As for how all this information is gathered, creditors need to operate within the boundaries of state law. According to Judgment Collectors, a Utah judgment collection agency operating in nearly a dozen states, policies and procedures can vary quite a bit from one state to the next.
The most common post-judgment discovery tools are:
- Interrogatories – These are a series of written questions submitted to the debtor through the creditor’s attorney. The debtor is compelled to furnish complete and truthful answers in a timely manner.
- Depositions – These are sworn statements provided by the debtor in the presence of the two party’s attorneys. Depositions are given as a result of attorney questions.
- Requests for Production – Creditors can go to court to ask for requests of production. These are formal requests for certain types of documents.
- Subpoenas – Subpoenas are legal orders compelling third parties to provide information about debtor income and assets.
Judgment debtors are expected to cooperate with post-judgment discovery. Any involved third parties, like banks and employers, are expected to cooperate as well. A lack of cooperation could result in further action by the court. For example, courts in some states will issue an arrest warrant against a debtor refusing to answer interrogatories or sit for a deposition.
Post typing judgment discovery is an important tool that helps judgment creditors move forward with collection. It lays the foundation for successful money judgment enforcement.
