The following applies to Arizona lawsuits and collection rights.

When a creditor sues and obtains a judgment there are several options available in order to collect on the judgment.  The one that is the most scary for the consumer is the “judgment debtor’s examination”.

The creditor may hire an investigator to do a “skip trace”, probably before the debtor’s exam, in order to determine what assets the judgment debtor owns.  Once the creditor has the judgment they can legally obtain additional information under federal laws (FCRA, FDCPA, etc.) than before they had the judgment.

debtor's examinationWhat if the judgment debtor (the person sued) refuses to appear at the debtor’s exam?

If the judgment debtor does not appear for a properly noticed and served debtor’s exam, the judgment creditor can ask the issuing judge/commissioner for a civil arrest warrant.  To issue such a warrant, the judge/commissioner will require the judgment debtor’s name, address, date of birth, and if available, a physical description and driver’s license number.  The important point is never ignore a subpoena, unless you are in bankruptcy or your attorney explains why you do not need to appear.

What does the creditor do at a judgment debtor’s exam?

judgment debtor's examThe creditor will ask the judgment debtor to produce bank statements, tax returns, car titles, payroll information, list of all debts and expenses, lease or deed of trust, location of all assets, how bills are paid (by check, cash or money in someone else’s account)

In addition to asking the judgment debtor for this information the judgment creditor can subpoena bank and brokerage account statements, garnish wages and require a sheriff to sell any property that is not exempt in order to satisfy the judgment.

Bankruptcy will stop the debtor’s examination.

Normally, unless this is a criminal charge, the threat of a debtor’s examination and seizure of assets ceases when a bankruptcy is filed.  But beware, if the debtor has committed fraud, caused damage by DUI and other exceptions, the  bankruptcy may not stop or discharge those actions or debts.

About the Author:

Diane L. DrainDiane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys.

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*From Diane: This article/blog is available for educational purposes only and does not provide specific legal advice. By using this information, you agree there is no attorney client relationship between you and me, and that this information should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*

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