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Casper

bank account levy, but no funds

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I'm looking at online court dockets, and it looks like some people close their checking accounts and/or quit their jobs to avoid having judgments against them collected on.  There are no entries after that.

 

What do the JDB and Creditor lawyers do about that?  A Judgment debtors exam?

 

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1 hour ago, Casper said:

What do the JDB and Creditor lawyers do about that?  A Judgment debtors exam?

There is no one size fits all answers. Some creditors never try to collect.  Others use a variety of methods. A debtor's exam is probably used most when they suspect the consumer is hiding assets.

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That is the pitfall of getting a judgement. A judgement is simply a piece of paper which allows you to take assets and/or income to settle a debt. If there are no assets or income, there is no way to collect on the judgement. The can continue to do debtors exams as would be considered reasonable by the court (I think in Minnesota, it is every 3 - 6 months). Some people use the term "Judgement Proof" for people like this but that is a misnomer because they can still get a judgement against you, the better term is "Collection Proof" because they cannot collect.

Note that the reason JDBs are willing to get judgements against people who are collection proof because sometime in the future, the person might get an inheritance or win the lottery. This is especially true in states where it is easy to renew a judgement in perpetuity.

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I would say a judgment debtor's exam would be pretty rare on smaller consumer debts. The most likely used methods are bank garnishment, wage garnishment, and placing a lien on real property to be paid off at a later date. 

A true debtor's exams can be expensive because of the use court reporters.

I have a colleague who works at a creditor's rights/collections firm. He has told me that collection proof now does not mean collection proof forever. He said many people who call themselves collection proof are also beneficiaries on life insurance policies, may later win a personal injury award or settlement, or as WC1000 said - later receive an inheritance. 

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2 hours ago, SJULawAlum said:
 
 

I would say a judgment debtor's exam would be pretty rare on smaller consumer debts. The most likely used methods are bank garnishment, wage garnishment, and placing a lien on real property to be paid off at a later date. 

A true debtor's exams can be expensive because of the use court reporters.

I have a colleague who works at a creditor's rights/collections firm. He has told me that collection proof now does not mean collection proof forever. He said many people who call themselves collection proof are also beneficiaries on life insurance policies, may later win a personal injury award or settlement, or as WC1000 said - later receive an inheritance. 

As for debtor exams, that depends on the state. In Minnesota, they can mail you the form and you are required to mail it back. The court only gets involved if you do not answer. Since it is that easy and cheap, they will continue to do it forever in hopes that you mess up and the JDB can get you arrested.

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Yeah, that is a form of a debtor's exam, but not the most effective one. New York has that too. We call it an information subpoena. Information subpoena's can tip off a debtor to conceal assets and make it tougher and harder for the creditor to find assets.

For example, if you show up to a debtor's exam deposition and disclose that you have $10,000 in a taxable brokerage account at E-Trade; the smart collection attorney is going to text someone at their office to prepare a garnishment to serve by the time the deposition is over.

 

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