What Is a Judgment Debtor Exam?

Judges can hold uncooperative debtors in contempt.

Judges can hold uncooperative debtors in contempt.

No one like to pay bills, but if you ignore them you may end up with a judgment against you. A judgment debtor exam is a court proceeding requested by a judgment creditor. The creditor asks questions about your assets, employment and finances at the exam. A debtor who does not cooperate during an exam can be held in contempt of court. Any information discovered by the creditor can be used to collect on the judgment.

What Happens at Judgment Debtor Exams?

A debtor is put under oath at a judgment debtor exam. Therefore, it is perjury to lie at an exam. The creditor and debtor go into a private room at the courthouse and the creditor asks the debtor questions about his finances. A creditor may also demand the debtor's financial records. Generally, requests for records are served on the debtor before the exam through a legal document called a subpoena. The subpoena tells the debtor when to appear in court and can make demands for him to produce specific records.

Judges Can Order Property Seizures

When a judgment debtor reveals the location of an asset, the judge can order a sheriff to seize it to pay for the judgment. For example, if the debtor owns a boat, it can be seized and sold at a sheriff's auction. Any proceeds over and above liens are first used to pay the sheriff's fees and court costs. The rest of the sale proceeds are applied to the judgment. The debtor generally is entitled to any remaining balance after such payments are made.

Judges Can Order Garnishments

A judge may issue a garnishment against a debtor's financial accounts revealed during an exam. Garnishments freeze accounts so debtors are unable to make withdrawals from them. A garnishment may also be issued against a debtor's wages. Each state allows a debtor a certain time to appeal a garnishment. However, the freeze remains in place during these periods. Also, each state has maximum percentages that can be garnished from a wage earner's check. Check with a local lawyer to determine your rights if you are garnished.

Consequences for Missing an Exam

You can land in hot water for skipping out on a judgment debtor's exam. The judge can issue a bench warrant for your arrest. This allows the police to haul you off to jail while you await a hearing before the court. So, don't ignore a subpoena to appear in court. The best approach is to fully cooperate. If you are really strapped and cannot pay a judgment all at once, the court can work out a payment plan so you can avoid more legal headaches.

About the Author

Maggie Lourdes is a full-time attorney in southeast Michigan. She teaches law at Cleary University in Ann Arbor and online for National University in San Diego. Her writing has been featured in "Realtor Magazine," the N.Y. State Bar's "Health Law Journal," "Oakland County Legal News," "Michigan Probate & Estate Planning Journal," "Eye Spy Magazine" and "Surplus Today" magazine.

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