THE JUDGMENT DEBTOR WHO WON’T PAY

by Nathan M. Brandenburg, Esq.

Previously, our newsletter discussed the steps to begin collecting upon a judgment. A judgment creditor’s remedies can be accomplished on a rather quick timeline and often do not entail the incursion of a great deal of attorneys’ fees (although it should be noted that some costs of collection can be added to a judgment). The following outlines a few simple procedures to follow when a judgment debtor refuses to pay.

Requests for an Order for Disclosure/Order for Disclosure

After a creditor is notified by the court of a judgment, the creditor is required to wait thirty (30) days before pursuing collections, unless the case originated in small claims court, in which case collection remedies can be pursued immediately. Thus, a debtor has thirty (30) days to satisfy a judgment before the creditor can pursue court-sanctioned collection remedies.

The first step in pursuing collection remedies is a Request for an Order for Disclosure. An Order for Disclosure is an Order from the court requiring the debtor to disclose all assets and cash. Requesting an Order for Disclosure is a simple process that is commenced by sending a request to the court certifying that there is a judgment that the debtor has failed to satisfy. The court will then issue an Order for Disclosure. The Order is sent to the debtor with an enclosed financial statement that the debtor is required to complete. The Order states that the debtor has ten (10) days to complete the financial statement that details assets owned by the debtor, the debtor’s bank accounts and the location of any assets, bank accounts and/or cash. The Order is designed to allow the creditor to ascertain assets and cash the judgment debtor has and where they are located so that the judgment creditor can obtain them through a Writ of Execution. The creditor is required to send the completed financial statement enclosed with the Order to the creditor within the prescribed ten (10) day period.

Orders to Show Cause

If the creditor, requests and obtains an Order for Disclosure against a debtor, and fails to receive a completed financial statement within sixteen (16) days the creditor may obtain an Order to Show Cause. An Order to Show Cause will require the judgment debtor to appear before the court to explain why the debtor should not be held in contempt by the court for failing to comply with the Order for Disclosure. If the debtor fails to appear the court may issue a warrant for the debtor’s arrest. Thereafter, if the judgment debtor is pulled over for a traffic violation or some other minor infraction, he or she will be arrested, processed through the County jail and required to stay in jail until he or she can appear before the court - a harsh, but effective remedy to compel a debtor to pay the judgment.