Collections: Post Judgment Collection - A Focus on Debtor's Interrogatories

     Once judgment is entered, what is next? Although all creditors would like for the judgment amount to "fall from the sky", it does not. Sometimes debtors will pay, either in full or in incremental payments. Sometimes creditors can garnish wages or accounts, or issue a levy on property. Sometimes creditors can bring a creditor's bill to sell real estate. But what can be done when the above listed remedies are not, or at least are not yet, options, or when there is no information about the debtor from which to devise a post judgment collection plan? Virginia Code §8.01-506 provides a good start - Debtor's Interrogatories. For the price of a summons to answer interrogatories (usually $44.00 plus service charges) an attorney can summon the debtor to appear before the court granting the judgment (or other court should the matter be transferred by the judgment court) or a Commissioner in Chancery (a lawyer appointed by the court to serve in this capacity) to examine the debtor's personal estate, specifically, to answer questions about income, assets and the debtor's general ability to pay in order to attempt to satisfy the judgment. The summons is enforceable by a capias (arrest warrant) which is issued through the court.

     The interrogatory procedure is summary in nature. No pleadings are required. No trial by jury is available. Under recent amendment to Virginia Code §8.01-506, the creditor may, as part of the interrogatory system, require the production of account books or other writings that contain evidence of the judgment debtor's estate, provided that the creditor gives an affidavit stating that he believes the books exist and identifies them with reasonable certainty.
     Virginia Code §8.01-506 allows a debtor to request that the interrogatories be held at a court most convenient for the debtor. Therefore, if the debtor moves far from the creditor's area, it may not be cost effective to pursue the interrogatories.
     It is important to note that a creditor cannot conduct debtor's interrogatories - only an attorney can. This certainly can be frustrating for creditors who take their own uncontested judgments and file their own garnishments, but it is a reminder as to why creditors are better served by turning all accounts over to counsel for collection prior to seeking judgments so that counsel can assess the attorney's fee provided in the contract or note, and can keep the entire process moving.

Collections: Fifth Amendment Claim Denied in Civil Action

     The Hanover County Circuit Court, in the case of EVB v. Strum, denied a defendant’s motion to quash a summons for debtor’s interrogatories and subpoena duces tecum, in which the debtor asserted his Fifth Amendment right against self-incrimination.

     The court ruled that there is no blanket Fifth Amendment right to refuse to answer questions in noncriminal proceedings. The privilege must be specifically claimed on a particular question in the debtor’s interrogatories, and the matter submitted to the court for its determination of the validity of the claim. Further, a defendant must assert his Fifth Amendment right in regard to each specific document in regard to a subpoena duces tecum, and the court must assess the claim as to each individual document.

Collections: Post Judgment Collection

     Various methods are available to collect judgment debts. Every collector is aware of the option of garnishment of wages and bank accounts. Most collectors are aware of sheriff's levies on personal property. However fewer collectors are aware of perfecting judgment liens against real estate owned by the debtor.

     When judgment is entered in the General District Court, unless appealed, it becomes final in ten days; Circuit Court judgments become final after thirty days. Once final, judgment creditors can request abstracts of the judgment from that Court (free for some counties and cities, $.50 cents per abstract in others). These abstracts can then be recorded (for $10.00 per abstract) in the Circuit Court in any county or city in which the debtor may own real estate. District Court judgments are good for ten years; Circuit Court judgments are good for twenty years. Each, upon motion to the court, can be renewed for an identical period of time. Since docketed judgment liens are good for twenty years, this docketing can provide a long-term hope for recovery. Once such a lien attaches, creditors may be able to bring suit to enforce the lien, or simply wait until such lien is paid at the sale of the property.
     These liens can sometimes survive bankruptcy as well. If the lien is docketed for at least ninety days prior to a filing for bankruptcy, the lien should survive, and may eventually be paid. Note, however, that the real estate must be owned by the identical parties against whom judgment was taken. Thus, judgment against one of the tenants by the entirety does not entitle the creditor to the benefits described.
     What can be done when there is no information about your debtor from which to devise a post judgment collection plan? Virginia law provides for a good start -- Debtor's Interrogatories. For the price of a summons (usually $41.00) an attorney can Summons the debtor to appear before a Commissioner in Chancery (a lawyer appointed by the court) to answer questions about income, assets and the debtor's general ability to pay. This Summons is enforceable by a Capias (arrest warrant) which is issued through the court. This statute does allow debtors to request that the interrogatories be held at a court most convenient for the debtor. Therefore, if the debtor moves far from the creditor's area, it may not be cost effective to pursue the interrogatories.
     The law firm of Lafayette, Ayers & Whitlock, PLC aggressively pursues all collection cases from initial demand through final payment. We account to our clients with monthly statements and reports, and immediate responses to client questions. We are willing to assist in client collection matters piecemeal as well. If our assistance is needed just to proceed with interrogatories, an hourly fee can be arranged.

Collections: Fifth Amendment Claim Denied in Civil Action

      The Hanover County Circuit Court, in the case of EVB v. Strum, denied a defendant’s motion to quash a summons for debtor’s interrogatories and subpoena duces tecum, in which the debtor asserted his Fifth Amendment right against self-incrimination.
      The court ruled that there is no blanket Fifth Amendment right to refuse to answer questions in noncriminal proceedings. The privilege must be specifically claimed on a particular question in the debtor’s interrogatories, and the matter submitted to the court for its determination of the validity of the claim. Further, a defendant must assert his Fifth Amendment right in regard to each specific document in regard to a subpoena duces tecum, and the court must assess the claim as to each individual document.