Secrets to Surviving a Debtor's Exam

Stressing about your Debtor's Exam?

So, you've received notice of a Debtor's Examination and you're worried about what to expect in the Debotr's Examination. Unfortunately, if you're scheduled for a Debtor's Examination, then it means that you owe a Judgment Creditor money and they're trying to collect. 

Basically, the person you owe believes that you may have additional assets to be sold to satisfy the judgment. The creditor is searching for assets. It's important to know that even though your appearance at the Debtor's Examination is mandatory, the Judgment Creditor can't ask about anything and everything. The scope of the Debtor's Exam must focus on assets that you have or that you had. 

Usually, the Judgment Creditor will only ask questions about: (i) whether you own any assets and bank accounts; (ii) how much other debt you owe and to who; and (iii) your employment information including your income and where you work. 

So, how do you survive the Debtor's Exam?

Stay calm and be prepared. Most likely, you've received a Court Order requiring your appearance and that you bring several documents with you. Most court orders will require you to bring 3 years of: 

  1. Bank Statements and any other documents that relate to checking, savings, or money market accounts; 
  2. All stock certificates or any other documents that deal with securities; 
  3. All Mutual Fund statements; 
  4. Credit applications and personal financial statements; 
  5. All documents related to interest in personal property items, like jewelry, boats, and vehicles;
  6. All documents related to any interest in real estate, even if it's jointly owned; 
  7. All documents that related to mortgages or liens of real property; 
  8. All State and Federal Tax Returns; 
  9. All Insurance Policies, whether whole or term insurance policies;
  10. All business documents related to a partnership, LLC, and/or corporation; 
  11. All records reflecting debts owed to Third parties; 
  12. All records reflecting income whether W-2, or 1099; and 
  13. Any and all other documents that may identify assets as orded by the Court order. 

If you don't have any money to collect, then there's nothing that they can collect. So you don't have to worry about it. 

Next, if an asset is not in your name and you haven't transferred within a reasonable proximity of the Debtor's Exam, then you don't have anything to worry about. 

If you're schedule for a Debtor's Examination, and you need help preparing for and responding to the Court order give us a call we can help.