A judgment debtor's exam, sometimes known as an examination of assets, is a legal process by which a judgment creditor can force his debtor to reveal the existence and location of any assets. By doing this, a judgment creditor can identify assets that can be seized in order to satisfy a debt. The process of conducting the exam varies by jurisdiction and may take place either in court or even through the mail. If a debtor refuses to respond to a court-ordered judgment debtor's exam, he may face charges of contempt of court.
In many countries, including the United States, when a plaintiff wins his lawsuit, he is responsible for collecting his winnings. He may do this in one of several ways, including working out a payment plan or a settlement with the debtor, garnishing the debtor's wages, or seizing the debtor's assets such as money in bank and investment accounts. The difficulty is that he may not be aware of what assets his debtor owns, nor will he know where to find these assets. The judgment debtor's exam allows him to ask his debtor for detailed information about his finances and the location of his assets. Once the creditor has this information, he can ask a sheriff or bailiff to seize the property or assets, which are then applied toward the repayment of the lawsuit award.
Each court system has its own way of conducting a judgment debtor's exam. In some places, small claims courts may actually permit judgment creditors to complete the exam through postal mail. This simply involves sending an examination worksheet to the debtor, who is responsible for returning it to the courthouse within a certain period of time. In other cases, an order to appear in court may be served to the debtor, who is then responsible for meeting the judgment creditor or her attorney at the courthouse to be put under oath and then questioned about the location and amount of his assets. Information that the judgment debtor may be required to provide would include his current sources of income, the location of any bank or investment accounts, as well as the existence of any valuable real estate or other property.
After a judgment debtor's exam is completed, the creditor and her attorney can examine the information and decide on the best course of action for collecting the debt. In some cases, the debtor may not have anything worth collecting, but because the judgment creditor now knows of the location of the debtor's bank accounts, she may periodically be able to levy these accounts if the judgment debtor's financial situation improves. In cases where the debtor does have significant assets, the creditor can begin the process of seizure or may be able to use this information as leverage in a settlement negotiation.
