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The Law Offices of Robert J. Nahoum, P.C. - A New York Consumer Protection Law Firm

What Happens at a Debtor Exam?

By: Robert J. Nahoum

What Happens at a Debtor Exam?

The Problem:

You were sued by a debt collector and a judgment has been entered against you.  The judgment creditor is hell bent on collecting on that judgment and has served you with a subpoena for a debtor exam.  What is it and what should you expect?

The Rules:

After a judgment has been entered against you the debt collector is on a ferocious hunt to find your money.  The law provides the debt collector with an ample tool-chest of devices to satisfy the judgment.  You can have your bank account frozen, your wages garnisheed and even have your property sold.  However, if the debt collector isn’t immediately aware of your assets or job, the debt collector is going to turnover every stone until they are found.  While the primary mechanism for turning over those stones is the Information Subpoena, a rarely used but powerful investigatory tool is the debtor exam or post-judgment deposition.

The law allows the debt collector to depose anyone it has a reason to think might have information about the judgment debtor’s ability to satisfy judgment.  At the debtor exam, the deponent (the person being deposed) must appear live before the judgment creditor’s attorney and a court reporter to give testimony, under oath, by answering questions about the judgment debtor’s income and assets.  The deponent is entitled to have an attorney represent him or her at the deposition but is not required to.

The debtor exam is usually held at the office of the judgment creditor’s attorney and is scheduled at a mutually convenient time. In addition to giving live testimony, most debtor exam subpoenas include a “duces tecum” provision which includes the production of documents at or before the deposition.  Duces tecum is a Latin phrase and literally translates to “bring with you”.

What You Should Do:

If you are broke, out of work, on social security, disability or unemployment and you have no non-exempt assets then you are what is called “judgment proof”.  That means that there simply is nothing the debt collector can take from you – you can’t get blood from a stone.  If you are judgment proof, show it to the debt collector.  If you have income or assets you may be able to negotiate a settlement of the judgment.  However, be careful when settling and make sure the terms are reasonable and feasible.

If the judgment was won by default or if you have reason to fight the merits of the judgment, you may consider trying to vacate the judgment.

Whatever course you take, you are always bettered protected when you are represented by a skilled and experienced attorney.  Consider speaking with a debt defense attorney to better understand your options and the cost of defense.

If you need help settling or defending a debt collection lawsuit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.

The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202

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