COLLECTING YOUR JUDGMENT: PART ONE
Creditors feel victorious when they finally win the big case and obtain a judgment against a debtor for money owed to the creditor. However, collecting on the judgment can sometimes be the hardest part of the lawsuit. Even if collateral was pledged for the debt, a deficiency can sometimes remain after the collateral for the debt has been sold and the proceeds applied to the debt. When a creditor is faced with a balance owed on a judgment, the creditor has options for collecting on that judgment debt, both in court and out of court. Part one of this series looks at the initial steps for collecting on a judgment in court.
Although procedures differ among the states, collecting the judgment in court in Indiana begins with filing a complaint in proceedings supplemental. In connection with the complaint, the court will order the debtor to appear in order to testify as to the location and extent of his assets from which he may be able to pay the judgment. When the debtor appears, he is placed under oath, and the creditor (or creditor’s counsel) is entitled to ask a wide range of questions with regard to income, assets, debts, liabilities, and other subjects which may bear on his ability to pay. Based on the information obtained from this proceeding, the creditor can decide if the debtor has assets that the creditor wants to pursue. The nature of the assets will inform the creditor’s decision about next steps. Those next steps will be the subject of part two of this series.