Lying Judgment Debtors

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I am not an attorney, I am a Judgment and Collection Agency Broker. This article is my opinion, based on my California experiences. If you want legal advice, you should contact a lawyer.

A valuable tool in judgment recovery is the potential power of a debtor examination. Like many tools having potential power, as Eric Clapton used to sing, "it's in the way that you use it".

Results from debtor examinations rely more on the examiner than the debtor. Most people lie to some extent, and when a debtor owes money on a judgment they do not want to pay, you should expect to hear a bunch of lies.

The best way to take a course is to learn the subject thoroughly before you take it. The right way to get work experience, is to have prior experience. The best way to do a judgment debtor examination is to know the answers for most of the questions you will ask, before you ask them.

Judgment debtor exams are not places to ask where all the assets are, and hearing a straight answer. They are for being persistent and establishing control.

Many beginning judgment recovery specialists do not do adequate preparation homework before and after a debtor examination. If your debtor is poor, and their family cannot help them pay off your judgment, there is little reason to schedule and serve a judgment debtor exam.

Some recovery specialists don't know know if their debtor is poor or not, and they serve a giant list of questions, on a "fishing trip", dreaming of discovering hints about assets.

The debtor often responds with "I don't know", or lies, in response to most questions. Some recovery specialists don't know at the time of the exam, what is a lie and what is not.

Many times, the debtor says they are poor, and have no records - and once in a while that is true. An experienced recovery specialist never relies only on what a judgment debtor says.

Many beginning recovery specialists stop after the first exam. Experienced recovery specialists request the judge to continue the judgment debtor examination hearing to a later date, to (e.g.) allow the debtor to find the documents you requested.

In too many California courts, there is no actual punishment for debtors that don't appear in court, or fail to comply with your document requests. That doesn't have to stop one from subpoenaing 3rd-parties, and requesting documents - if they're likely to know about, or may possess, some of the judgment debtor's assets.

An experienced judgment recovery specialist may combat lackadaisical or stubborn judgment debtors with subpoenas to other parties, maybe the judgment debtor's spouse, landlord, business partners, or relatives. 3rd-parties are only required to answer questions concerning the debtor and the judgment debtor's assets or information.

Success in accomplishing debtor examinations comes from giving them your full attention, doing your homework, and being ready to continue the exams for the time it takes to be paid; in the pattern of learning, examining, then subpoenaing new people, entities, and records. This is repeated for as long as it takes to be paid.

Think of the first round of debtor exams as being the best occasion for the debtor to lie. That first examination could be continued on a later date, so you then can follow up on any lies.

For example, let us suppose you found out that the debtor owns 3 recent vehicles, a Suzuki motorcycle, and BMW and Acura vehicles. On the first examination, you ask the debtor who owns those autos, and they claim the bank owns the two cars, and the motorcycle is owned by their nephew.

You did the homework, and know the title for all 3 vehicles belong to the judgment debtor. The two cars have bank loans on them, however the judgment debtor owns the motorcycle free and clear.

On the first, or on the second examination, ask the debtor questions about their nephew, including their name, how old he is, where he lives and works, and why does the nephew keep their motorcycle in their name, and when did they last see their nephew.

Additionally, ask about the motorcycle, what model and size it is, who bought it, who it was bought for, where is it stored, and is the motorcycle the correct size for both the judgment debtor and their nephew?

Then, inform the debtor you need to continue the examination, and serve a subpoena for the nephew to come in and answer questions about the motorcycle, and bring the receipt for it.

When the debtor cannot or will not release the name of their nephew, ask the judge to sign a turnover order for the motorcycle. If the court chooses to believe some of the judgment debtor's lies, they can make an allowance for the "unnamed" nephew to make a 3rd-party claim.

The turnover order may be for the title of ownership for the motorcycle. It can also be for the motorcycle itself, but that means the debtor is expected to turn the motorcycle over to the sheriff for a later, sheriff's auction sale. You will have to pay the sheriff for their costs and their work.

Your goal is, one way or another, to get your judgment paid; either by having the sheriff sell the judgment debtor's assets, or the judgment debtor choosing to pay you, to avoid future court appearances for them and potentially others. Whether they lose their motorcycle or not, exams may be continued as needed.

Who is going to become inconvenienced the most by debtor exams, you or your debtor? Judgment debtor examinations can become an opportunity to find a to continue them, so the judgment debtor will be compelled to come back again and again at later dates. Keep your eyes and ears open for anything that requires a continuation, new entities to serve a subpoena on, or to discover new documents and then review them.

Until a judgment is satisfied, on certain debtors, a judgment debtor exam might be continued for as long as needed, so the creditor can get every document that they requested. Keep it focused on asset finding and reasonable, so the judge won't think you are simply harassing the judgment debtor.

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