Judgment Debtors Lie

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

One of the best tools in the judgment recovery business is the potential effectiveness of a judgment debtor examination. Similar to many tools having potential power, as Eric Clapton would sing, "it's in the way that you use it".

Payoffs from debtor examinations rely more on the skill of the examiner than the judgment debtor. Most people lie to some extent, and when a debtor owes money on a judgment they don't want to repay, one should expect to hear a bunch of lies.

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

Judgment debtor exams are not for asking where the debtor's assets are, and getting a straight answer. Examinations 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 judgment debtor is poor, and their family cannot help them satisfy the judgment, there is no reason to schedule and serve a debtor exam.

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

The debtor usually responds with "I don't know", or lies, in response to your questions. Some enforcers do not know at the time of the examination, if the debtor is lying or not.

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

Most new recovery specialists stop after one examination. Experienced enforcers request the judge to continue the debtor exam hearing to a future date, to (e.g.) allow the judgment debtor to locate the documents you had requested.

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

The experienced enforcer might respond to stubborn or lackadaisical judgment debtors with subpoenas to other people, maybe the judgment debtor's spouse, landlord, relatives, or business partners. Third-parties are only required to answer questions concerning the debtor and the judgment debtor's information or assets.

Success in performing debtor exams comes when you give them your complete attention, preparing for them, and being ready to continue the examinations for the time it takes to get paid; in a pattern of examining, learning, 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 judgment debtor exams as being the best time for the judgment debtor to lie. The first examination should be continued on a future date, so you then can follow up on some lies.

As an example, let us say you found out that the judgment debtor owns 3 fairly new vehicles, a Honda motorcycle, and Acura and BMW autos. On the first examination, you ask the judgment debtor who owns those vehicles, and they claim the bank owns the two cars, and the motorcycle belongs to their nephew.

You did your homework, and know the title for all 3 vehicles belong to the judgment debtor. The 2 cars have bank loans on them, but the judgment debtor owns the motorcycle free and clear.

On the first, or on the second exam, ask the judgment debtor questions concerning their nephew, including how old he is, their name, where he lives and works, and why did the nephew keep their motorcycle in their name, and when was the last time they saw their nephew.

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

Then, tell the judgment debtor you are going to continue the exam, and issue a subpoena for the nephew to come in and bring the receipt for the motorcycle, and answer questions about it.

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

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

Your goal is, in one way or the other, for your judgment to be paid; either by paying the sheriff sell the debtor's assets, or the judgment debtor deciding that they should pay you, to avoid future court appearances by them and potentially others. Whether they lose their motorcycle or not, examinations can be continued as needed.

Who is going to become inconvenienced the most by judgment debtor exams, you or the debtor? Debtor examinations can become a chance to find a to continue them, so the debtor will be compelled and 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 paid off, on certain judgment debtors, a debtor exam might be continued for as long as needed, so the creditor can get every document they had requested. Keep everything focused on asset finding and reasonable, so the judge will not think you are simply harassing the debtor.