California Judgment Debtor Examination Defense Lawyer

If you owe money to a creditor and they have secured a judgment against you, they might try to enforce that judgment through a judgment debtor examination. This process allows creditors to gather information about your financial situation, so they can find ways to collect the debt. Below, consumer protection lawyers at Fitzgerald & Campbell, APLC will help you understand the purpose of a judgment debtor examination, what to expect during the process, how to prepare for it, and how we can protect your rights in these types of cases.

What Is a Judgment Debtor Examination?

A judgment debtor examination is a legal process where a creditor asks you questions under oath about your finances. The purpose is to find out what assets or income you have that can be used to pay off the debt. In California, this process is authorized by Code of Civil Procedure. The creditor can request this examination if they have a valid court judgment against you. During the examination, you will have to provide information about your bank accounts, employment, property, and other assets.

The judgment debtor examination is a key step in the debt collection process because it helps the creditor figure out the best way to collect the money you owe. This can include garnishing your wages, levying your bank accounts, or placing liens on your property.

When and Why a Creditor Requests a Judgment Debtor Examination

If a creditor has won a judgment against you, they may ask for a judgment debtor examination. This happens when a creditor wants to find out about your assets and income to see how they can collect the money you owe. In California, this process is a way for creditors to gather information that could lead to actions like wage garnishment or bank levies.

Creditors usually request a judgment debtor examination when they believe you have assets or income that could be used to pay the judgment. They might also request it if previous attempts to collect the debt have failed. Creditors are looking for any property, bank accounts, or sources of income that can be legally accessed to satisfy the debt.

To start the process, a creditor must file an application with the court. They will request an order for you to appear at a specified time and place for the examination. If the debtor hasn't been examined in the last 120 days, the court will issue the order on an ex parte application. If an examination occurred within 120 days, the creditor must show good cause.

The order will include details like the date, time, and location of the examination. You must receive this notice personally, and it must be served at least 10 days before the examination date. Under California law, if you ignore this order, the court can issue a bench warrant for your arrest, compelling you to attend.

The Judgment Debtor Examination Process

Once you've been served with the order, you need to attend the examination as scheduled. The examination usually takes place at the courthouse, but it can sometimes be held at another location, such as the creditor's attorney’s office. The notice you receive will specify where you need to go.

During the examination, you can expect the process to last anywhere from 30 minutes to a few hours. The creditor or their attorney will ask you a series of questions about your finances. This might include questions about your employment, income, bank accounts, real estate, vehicles, and other personal property. The purpose is to identify assets that can be used to satisfy the judgment.

In addition to the creditor and their attorney, a court reporter may also be present to record the proceedings. You have the right to bring your attorney as well.

Rights and Obligations of the Debtor

During a judgment debtor examination, you have specific rights under California and federal law. You have the right to be treated fairly and with respect. The creditor or their attorney cannot harass you or use abusive tactics. You also have the right to remain silent if a question would force you to admit to committing a crime. You may bring an attorney with you to the examination to help protect your rights.

You need to bring all required documents, such as bank statements, pay stubs, and records of other assets. Providing false information or hiding assets can have serious consequences. If you lie under oath, you could face charges of perjury, which is a criminal offense. Additionally, if the court finds that you are not cooperating, it can hold you in contempt. This might lead to fines or even jail time.

If you do not show up for the examination, the court can issue a bench warrant for your arrest. It is important to take this process seriously and comply with all legal requirements. Being honest and prepared will help you avoid additional legal trouble and can make the process smoother for you.

How to Prepare for a Judgment Debtor Examination

Before your judgment debtor examination, take some important steps to prepare. Start by gathering all the documents you might need. Organizing these documents in advance will help you provide accurate information during the examination.

Review your financial records carefully. Make sure you understand your income sources, monthly expenses, and any debts you owe. Knowing these details will help you answer questions more confidently and accurately. If you spot any errors or discrepancies in your records, try to resolve them before the examination.

Consider seeking legal advice. An attorney can help you understand your rights and obligations and provide guidance on how to handle the examination. They can also represent you during the examination, which can be very helpful if you are unsure about any part of the process.

Here are some tips for effective preparation:

1. Write down a list of all your assets and debts. This can include real estate, vehicles, bank accounts, retirement accounts, and any other property you own.
2. Practice answering potential questions about your finances. Think about what the creditor might ask and how you can answer clearly and truthfully.
3. Arrange your documents in a logical order. This will help you find and present the information quickly during the examination.
4. Stay calm and focused. The examination can be stressful, but staying composed will help you provide the necessary information without getting flustered.

Possible Outcomes of the Examination

After the examination, several outcomes are possible. The creditor might take further action based on the information you provided. One common action is wage garnishment. In California, creditors can garnish your disposable income. This means your employer will withhold part of your wages and send it directly to the creditor until the debt is paid off.

Another possible action is a bank levy. Under California law, a creditor can freeze your bank account and take the funds to pay the debt. You will receive a notice, and you have 15 days to claim any exemptions. If you do nothing, the creditor can take the money from your account.

Creditors can also place a lien on your property. This means the creditor has a legal right to your property, and you cannot sell or refinance it without paying off the debt. If the debt remains unpaid, the creditor can eventually force a sale of the property to recover the money.

If these actions are pursued, you have several options. You can try to negotiate a payment plan with the creditor. You can also claim exemptions for certain types of income and property. For example, Social Security benefits and some personal property are exempt from garnishment and levy.

How to Respond to Post-Examination Actions

If the creditor takes further action, it is important to know your options. If you face wage garnishment, you can file a claim of exemption in California. This can reduce or eliminate the garnishment if you can show that the money is needed for basic living expenses. You will need to provide proof of your income and expenses to the court.

If your bank account is levied, you can file a claim of exemption. This can protect funds that are exempt from seizure, such as Social Security benefits, disability payments, and other protected income. You will need to act quickly and provide evidence of the exemptions to the court.

For property liens, you can negotiate with the creditor to pay off the debt over time. If the lien is on your home, California's homestead exemption can protect a certain amount of equity in your home from being used to pay off debts. The amount protected depends on your age, income, and family status.

Legal remedies are available to help you deal with these actions. Filing for bankruptcy is one option that can stop wage garnishments, bank levies, and property liens. Chapter 7 bankruptcy can discharge most debts, while Chapter 13 allows you to set up a repayment plan.

California Consumer Protection Lawyers

If you are facing a judgment debtor examination or any other collection action, you do not have to navigate this alone. The experienced consumer protection lawyers at Fitzgerald & Campbell, APLC are here to help you understand your legal rights and options. Get in touch with Fitzgerald & Campbell, APLC by call/text to: (855) 709-5788 or contact us online for a consultation. Or email to intake@fclawoffice.com. Consultations are free and easy. Get the support you need to protect your financial future.