Summary: After winning a money judgment, both creditor and debtor enter the discovery phase. Judgment creditors often turn to interrogatories as their primary discovery tool. When successful, interrogatories produce a significant amount of useful information.
Attorneys in civil cases rely on a host of discovery tools to build their cases. One such tool is known as interrogatories. In fact, interrogatories are one of the most commonly used tools during the discovery phase. But to a judgment creditor who has already won his case, interrogatories become a more powerful tool after the fact.
Judgment creditors and their attorneys rely on interrogatories to learn as much as they can about debtor assets and income. When interrogatories reveal all relevant information, they establish the foundation on which collection efforts will be made. When they do not reveal everything judgment creditors want to know, there are other discovery tools available.
Interrogatories: The Basics
Whether used during the discovery phase or post-judgment, interrogatories are essentially a list of formal, written questions prepared by one party and sent to the other. In a money judgment scenario, the judgment creditor’s attorney prepares the questions and forwards them to the judgment debtor’s attorney. Three key factors are in play:
- Answering Under Oath – The judgment debtor is compelled to answer the questions under oath. Answers must be truthful and complete, or the debtor could be charged with perjury.
- Scope of Inquiry – Post-judgment interrogatories are intended to glean information about debtor income and assets. As such, the scope of the creditor’s inquiry is limited to just those topics. Questions are likewise limited.
- Interrogatory Service – Interrogatories are only served to the parties directly involved in the litigation (i.e., plaintiff and defendant). If a creditor wants information from third parties, those third parties must be subpoenaed.
Judgment creditors typically use interrogatories to learn about a debtor’s employment and wages. Creditors tend to ask questions about bank accounts, real estate, personal property, and even investments. The goal is to discover every possible means of collecting the outstanding debt.
Interrogatories: The Process
As a judgment collection agency operating in nearly a dozen states, we have seen first-hand that the process for serving interrogatories can differ. This is because the states have different rules about how money judgments can be collected. However, interrogatories usually follow a general, 4-step process:
- Drafting – The creditor or their attorney drafts a list of questions to be sent to the debtor. Many states offer templates. However, creditors can create their own customized list of questions as long as they stay within the legal scope of income and assets.
- Service – Once completed, the questions are served on the debtor. Some states require personal service by either the sheriff or a process server. Other states allow service by the creditor’s attorney.
- Response – Once served, the debtor has a set amount of time to respond with truthful answers. The term is 30 days in most states. A few states allow only 14 days, while some others allow 45 days.
- Verification – Upon answering the questions, the debtor must also sign a document verifying that all answers are true. Signing the document is akin to swearing under penalty of perjury.
Waiting 30 days to get answers back can be a bit frustrating to judgment creditors. But waiting is often wiser than jumping immediately into collection efforts without knowing everything about a debtor’s income and assets. If nothing else, knowledge is power in the judgment collection game.
The Role of the Attorneys
Judgment creditors and debtors are not required to utilize their attorneys during the discovery process. However, most do for obvious reasons. Attorneys play a vital role in ensuring that everything is done properly and legally.
The creditor’s attorney writes the questions. Fortunately, attorneys know how to phrase questions to limit the amount of wiggle room a debtor has when answering them. For example, a creditor might be content to ask who the debtor banks with. An attorney would ask the debtor to list every financial institution the debtor has dealt with over the last 3-5 years.
On the debtor’s side of things, an attorney carefully scrutinizes each and every question to make sure it is within the allowed scope. An attorney will often object to questions that are overly burdensome, vague, or request privileged information.
Finally, the two attorneys will meet and confer on behalf of their clients whenever issues with interrogatories arise. The goal is to work things out rather than having to ask the court to intervene. Attorneys have an advantage because they know things about the law that neither creditor nor debtor would be expected to know.
When Debtors Ignore Interrogatories
Although it is in a debtor’s best interest to respond to interrogatories with truthful answers, some debtors choose to ignore service. They either refuse to accept the documents being served to them or they accept the documents but do not respond. Though a setback, ignoring interrogatories does not prevent a judgment creditor from pursuing collection.
Judgment creditors still have options, including:
- Motion to Compel – A judgment creditor can seek a Motion to Compel from the court. If granted, the order compels the debtor to answer in a timely manner.
- Contempt of Court – Some jurisdictions allow creditors to seek a Contempt of Court order. Such an order involves a bench warrant issued by the court. A bench warrant allows for the debtor’s arrest and forcible appearance in court to answer questions.
- Financial Sanctions – Creditors can also seek financial sanctions. They would ask the court to fine the debtor and order them to pay additional attorney fees for extra work involved in getting interrogatories completed.
When all is said and done, interrogatories may tell only part of the story. Creditors and their attorneys must then turn to other means of discovery, including public and private databases, court records, social media, etc.
Interrogatories are among the most commonly utilized discovery tools in civil litigation. They are in necessity in money judgment cases because the answers they generate lay the foundation for a creditor’s collection efforts by revealing valuable information about a debtor’s income and assets.
FAQs
Can creditors ask anything during interrogatories?
No. Interrogatories are limited only to financial questions. Creditors can only ask things pertaining to debtor income and assets.
Is there a limit to the number of questions that can be asked?
There is no limit as long as a creditor remains within the legal scope. Practically speaking, however, there are only so many things a creditor can ask about.
What happens if the debtor’s attorney objects to some of the questions?
The attorneys for both parties are likely to meet and confer in the event of objections. They will work things out as best they can. If they cannot work out an amicable solution, the court may be asked to intervene.
What can a creditor do while waiting for the debtor to respond?
During the 30 days it takes for a debtor to respond to interrogatories, a creditor or its representatives could begin an independent asset search.
Are creditors required to conduct interrogatories?
Interrogatories are not mandatory. But as a powerful discovery tool, it makes little sense to begin collection efforts before conducting them.