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Facing a Collection of a Judgment

Posted on May 15, 2014 in Bankruptcy Information, Bankruptcy procedures

There are times when a person may be found to owe another person money.  Usually one party sues another over a promissory note or a charge card. After a court proceeding, if the Court finds that the debt is valid, the Court grants a judgment in favor of the creditor.

One way the Judgment Creditor can try to collect is by filing a Citation to Discover Assets with the Court and serving the Judgment Debtor. The Judgment Debtor can be taken to court and asked about any and all assets that he has that can be used to satisfy the judgment. Once a Judgment Debtor is served with the Citation, he cannot sell, transfer, or dispose of his property until the Judgment Creditor has a chance to inquire about the assets.  The Citation acts to freeze the assets of the Judgment Debtor.

The Judgment Creditor may issue a similar Citation to Discover Assets upon a third party not part of the original dispute, in order to determine if the third party has assets of the Judgment Debtor. If, for example, a bank has the Judgment Debtor’s money in an account, the bank can be prevented from releasing any funds out of that account. The Judgment Debtor will know when the Judgment Creditor contacts the third party as a copy of the Third Party Citation to Discover Assets is mailed to Judgment Debtor.

Depending on what  is discovered in the post-judgment Citation hearing(s), the Judgment Creditor may be able to reach the Judgment Debtor’s bank account, seize non-exempt assets, and even garnish wages in order to satisfy the amount of the judgment that remains due and owed. The Judgment Debtor may be able to work out a payment arrangement with the Judgment Creditor. Obtaining legal assistance is advisable as soon as possible. Some Judgment Creditors may be willing to compromise on the amount owed, because the Judgment Debtor may have the option of seeking bankruptcy protection.  If the Judgment Debtor qualifies for a Chapter 7 discharge, the Judgment Creditor could receive nothing.

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