Asset Protection

HOW CREDITORS LOCATE ASSETS

A judgment creditor seeking truthful information about finances can use five powerful discovery processes:

1. Court examination: Most states require a debtor to personally appear in court to disclose both assets and income. The court can then determine what the debtor can afford to pay. This supplementary procedure is most frequently used with smaller cases.

2. Deposition: A judgment creditor can also depose the debtor for an office interrogation. This is conducted in a manner similar to other litigation depositions. California and several other states require court authorization to conduct this deposition.

3. Interrogatories: A creditor can submit written questions, or interrogatories, the debtor must answer under oath. Less costly than oral depositions, interrogatories are seldom relied upon to discover assets because a debtor may be either unresponsive or answer vaguely.

4. Request to produce documents: A creditor can require the debtor to deliver specific documents to the creditor for examination. This may be via a deposition or independent request.

5. Subpoena duces tecum: This process compels the debtor to deliver specified documents to the creditor. Because it is more forceful than a simple request to produce documents, most plaintiff attorneys prefer the subpoena. And a subpoena duces tecum can also compel third parties to appear for examination, testify about the debtor's finances and compel the third party to provide specified documents.

Asset discovery procedures are not exclusive. A creditor may use them singly or in combination. For example, a creditor may begin the discovery process with interrogatories and later advance to depositions. These tactical decisions will depend upon the amount of the claim, the debtor's responsiveness, costs, distance and other factors that formulate the most expedient way to discover assets.