Whenever Judgment Collectors takes a new case, we start by looking at all the available information pertaining to the debtor’s income and assets. Our position on this does not differ from a judgment creditor who attempts collection on their own. Information is key to figuring out how to collect.
It has been our experience that first-party information is the best type of information for collection efforts. What is first-party information? It is information that comes directly from the judgment debtor. We will certainly take advantage of third-party information when need be, but we prefer first-party when we can get it.
Voluntarily Answering Questions
An ideal situation for the average judgment creditor is submitting questions that the debtor answers voluntarily. Questions are designed to solicit information about the debtor’s income, property, liabilities, existing debts, etc.
The ideal situation would also see the debtor answer the questions thoroughly and in a timely manner. Accurate and complete information gives the creditor a basis on which to devise a collection strategy. Now here is the money question: how often do things actually work out this way? Not as often as you might think.
Slow Walking Information Sharing
One of the more frustrating aspects of what we do is the tendency for judgment debtors to slow-walk information sharing. Some debtors don’t respond to questions in a timely manner. Others choose to furnish information in the form of a slow trickle that seems to take forever to get to what we really want to know. Still others outright lie or simply ignore written questions.
Fortunately, most states offer judgment creditors at least some measure of redress. In Utah, creditors can file an Ex Parte Motion for Hearing to Identify Debtor Assets. Other states may have similar procedures. In essence, the motion asks the court to compel the debtor to appear at a future hearing where they will divulge any and all relevant information.
Furnishing Relevant Documents
One of the extra benefits of a court hearing is documentation. In other words, being compelled to appear in court to answer questions also involves bringing certain documents. Courts typically demand that judgment debtors furnish the following types of records:
- Nonexempt Property – Records pertaining to property like real estate, vehicles, bank accounts, stocks, bonds, and certain other types of investments.
- Employment and Income – Documents that verify the debtor’s employment and income. Common examples include pay stubs and tax records.
- Banking Information – Records relating to checking, savings, and investment accounts are often required. This can include monthly and quarterly statements.
- Business Ownership – If the debtor is a business owner, records pertaining to that ownership are often required.
- Debts Owed – Courts may require that debtors furnish records pertaining to any debts owed to them by others. Why? Because those debts might be considered assets that could be seized through a garnishment order.
Basically, any documents relating to a debtor’s non-exempt property, assets, and income are required. When compelled to appear in court for a discovery hearing, the debtor isn’t allowed to hold anything back. Failure to be truthful could lead to a contempt charge.
When Debtors Don’t Cooperate
Clients often come to Judgment Collectors because debtors failed to cooperate. What then? Fortunately, we have access to a variety of third-party data that offers a fairly accurate picture of a debtor’s financial position. We prefer first-party data, but we can certainly work with third-party data if necessary.
Are you struggling to collect from an uncooperative debtor? If so, contact us. Collecting outstanding judgments is our specialty. If we accept your case, we will get to work on it right away.