Creditor's Examinations

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I got a notice telling me to appear for a "creditor's examination" or "deposition." What does that mean?
If you get a notice ordering you to appear at a "creditor's examination" it means you were sued in court and the judge has already entered a judgment against you. Now the creditor wants to collect the money the court says you owe. If you do not know anything about the judgment, you can contact the court which entered the judgment to get more information. If a default judgment was entered against you, it is possible to ask the court to set aside the default judgment.

A creditor's examination is a court-ordered meeting between you and the judgment creditor (the person who got a judgment against you) to determine whether you have any way to pay the judgment. The judgment creditor will want to know about your income, savings and property. Your bank or employer may also have to give information to the creditor and the court. The purpose of a creditor's examination or deposition is to decide how you will pay the judgment. You can make arrangements to pay the creditor, your property can be sold, or your wages can be garnished unless you are judgment proof.

Do I have to go to the creditor's examination or debtor's deposition?
Yes. If you don’t go, you may be found in contempt of court and a warrant for your arrest can be issued. You could then be arrested and put in jail until another court date is set. If you miss a hearing, you should contact the court and ask that another court date be set.

Also, you need to go to the hearing so you can answer questions regarding your income and property AND to tell the court what exemptions you are entitled to claim, so that your creditor cannot take those items.

What will happen during the examination or deposition?
The judgment creditor and/or the court will ask you questions about your income and what property you own. You may want to bring proof of your income, such as paycheck stubs, or proof of social security benefits you receive. Sometimes you will actually meet with the judgment creditor, and not go in front of the judge. You can try to work out a payment arrangement with the judgment creditor. Before you agree to make payments, you should make sure you understand what a judgment creditor can and cannot do to get his or her money. You do not have to make an agreement with the judgment creditor; you can ask to go before the judge.

You cannot be sent to jail because you cannot pay your debt.

What is the difference between a creditor and a judgment creditor?
A creditor is someone you owe money to. A judgment creditor is someone who has gone to court and gotten a court judgment against you saying that you owe money to that judgment creditor.

I offered to pay the judgment creditor $25 a week. Can he still make me go to court for a creditor's examination?
Yes. The judgment creditor does not have to accept a payment arrangement from you. The judgment creditor can instead make you come to a creditor's examination, so the judgment creditor can see how much money and property you have.

Can the judgment creditor make me sell my house or my property?
If you own real property (such as a house or land), a judgment creditor can file a judgment lien against any real property that you own. This means that before you sell the property, you will have to pay off the judgment. The judgment creditor can also ask the court to order you to sell some of your property to pay a judgment. (This is usually done only if you own a large amount of property or very valuable property). The judgment creditor generally cannot just take your property; the judgment creditor must get a court order first.

However, the judgment creditor cannot ask to sell any of your property that is “exempt property.” “Exempt property” is protected from creditors and cannot be taken. See What Kind of Property Can My Creditors Take From Me? and Wage Garnishment for more information about exemptions.

Reviewed August 2009