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7 Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgment – Mistake #2

There are seven critical mistakes judgment creditors make when attempting to collect their judgment. Last week, we covered mistake #1, “Conducting a Debtor’s Exam (Deposition) of the Judgment Debtor as Soon as the Judgment’s Awarded”. Now, let’s identify the problem we are dealing with this week. Read our next blog for Mistake #3 of 7.

MISTAKE #2: EXPECTING THE JUDGMENT DEBTOR TO ACTUALLY APPEAR FOR THE DEPOSITION, TELL THE TRUTH, AND PRODUCE THE SUBPOENAED DOCUMENTS

There is a significant money judgment in place that needs to be enforced (collected). The standard operating procedure by most creditors’ attorneys is to issue a subpoena duces tecum for the judgment debtor to appear before a court reporter, bring all the subpoenaed documents and records, and to truthfully answer all questions concerning the type, location and value of all assets and liabilities. This process is designed to aid the judgment creditor in recovering his losses.

Having attended hundreds of depositions over the past 50 years, I have never—not one time—seen a judgment debtor fully comply with the subpoena. Once the deposition finally happens (usually after the debtor’s attorney has sought multiple postponements due to “health emergencies”), many (if not all) of the key documents that have been subpoenaed are not produced. Frequent excuses include:

  • I didn’t understand you wanted ALL my various bank accounts.
  • I didn’t know you wanted records prior to this year.
  • I don’t have a current financial statement.
  • My accountant has not completed my tax returns for last year.
  • I couldn’t find a copy of my homeowner’s insurance policy with the schedules of my personal property.
  • I have changed phone companies and didn’t keep my old phone records.
  • My other attorney has the only copy of my Will/Trust and he is out of state in a long trial.
  • I don’t remember the address of that little ranch we bought in Texas.
  • I’ll have to ask my wife if we still own that stock. She told me years ago she planned to sell it.
  • We have now identified the second problem. It is going to be very difficult, if not impossible, to get the truthful information we are legally entitled to from the judgment debtor.

We have now identified the second problem. It is going to be very difficult, if not impossible, to get truthful information we are legally entitled to from the judgment debtor.

In order to counteract this problem, you must get the answers to your questions from independent sources long before you try to depose the debtor. Subpoena the records directly from the third parties, NOT from the debtor. Get bank records (i.e. loan applications with support documents such as tax returns and financial statements) as well as at least 24 months of credits and debits for each account via subpoena to the debtors bank(s), plus copies of the last 6 to 12 payment instruments from which you may find additional bank accounts.

The debtor’s bank or mortgage company can provide the name, address and policy number of the debtors’ homeowners insurance company. A proper subpoena will have a copy of the policy with the scheduled valuable personal property such as artwork, jewelry, furs, antiques, guns, collector items, etc.


Only depose your debtor after you have documented the answers to most of the questions. During the depositions, allow the debtor to commit as much perjury as possible before refreshing his memory several times with the documents you’ve obtained. Once you have the debtors’ undivided attention, you can ask the questions you do not have the answers to and probably get truthful answers.

Never expect the judgment debtor to be truthful unless forced to do so by the evidence you produce (and the threat of perjury). You should have sufficient evidence for the court to award you the assets you have documented, with or without the debtor’s cooperation. You will be more successful when you do your homework without depending on cooperation from the debtor. This is not a quick or easy process. It takes a commitment from the client and diligent work by the entire judgment enforcement team.

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Testimonial

“When I was general counsel for First Interstate Bank, I used Joe Dickerson for locating assets, investigating behavior and asset discovery. He did excellent work and always got the information I needed without compromising the bank in any way. He’s more thorough and kept in better touch with me than other investigators. I’d give him a grade of 96 or 97 out of 100.”

Frank Brainerd, Retired
Banker/Attorney

2014-11-11T18:20:20+00:00

Frank Brainerd, Retired
Banker/Attorney

“When I was general counsel for First Interstate Bank, I used Joe Dickerson for locating assets, investigating behavior and asset discovery. He did excellent work and always got the information I needed without compromising the bank in any way. He’s more thorough and kept in better touch with me than other investigators. I’d give him a grade of 96 or 97 out of 100.”

“Joe is the most competent investigator I’ve ever found. He has rare ability to find hidden assets. Others claim it, Joe has it. He understands the Rules of Evidence, he knows how to talk to people to develop a fact pattern, and he has a sixth sense for fraud. Joe has unquestioned integrity and delivers value for his services.”

Andrew Quiat
, Attorney

2014-11-11T18:12:51+00:00

Andrew Quiat
, Attorney

“Joe is the most competent investigator I’ve ever found. He has rare ability to find hidden assets. Others claim it, Joe has it. He understands the Rules of Evidence, he knows how to talk to people to develop a fact pattern, and he has a sixth sense for fraud. Joe has unquestioned integrity and delivers value for his services.”

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Michael Whalen, 
Businessman

2014-11-11T18:21:13+00:00

Michael Whalen, 
Businessman

“Financial Forensic Services did an excellent job in the way they executed my case. They were very straightforward. They stated what they could do for us and they did it. And, from a personal standpoint, they are excellent. Both my wife and I felt very comfortable working with them.”

” I was prepared to dismiss a federal case involving millions of dollars against a local individual who claimed to have no substantial assets. After your staff hit the records and delved into the transactions behind the transactions, you discovered the individual to actually be worth a few million dollars. We continued the case to conclusion. We were also very happy with the financial background examinations you conducted of the former directors of two failed national banks. The heart of any civil case is whether there is a pot at the end of the lawsuit. You were our lucky leprechaun in finding such pots.”

R. Michael Sentel
, Former Section Chief Legal Division, FDIC

2014-11-11T18:13:08+00:00

R. Michael Sentel
, Former Section Chief Legal Division, FDIC

” I was prepared to dismiss a federal case involving millions of dollars against a local individual who claimed to have no substantial assets. After your staff hit the records and delved into the transactions behind the transactions, you discovered the individual to actually be worth a few million dollars. We continued the case to conclusion. We were also very happy with the financial background examinations you conducted of the former directors of two failed national banks. The heart of any civil case is whether there is a pot at the end of the lawsuit. You were our lucky leprechaun in finding such pots.”

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Tim Gabelhouse
, Attorney at Law

2014-11-11T18:20:41+00:00

Tim Gabelhouse
, Attorney at Law

“As an environmental law firm, we use Joe Dickerson to locate prior business owners and do corporate genealogies. He is persistent, that’s the key to a good investigator, and he has a knack for understanding how people move money and do business. That tells him what rocks to look under. Joe is vastly superior to other investigators in two ways: he lets you know what’s going on and he’s honest with you, because he tells you if there’s really anything there worth pursuing. He is unusually thorough and creative finding people. Joe has earned his fee every time.” “If the information is to be found, then I believe that they will find it. Their service enabled me to do a much better job for my client.”

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Jim Thomas
, Prosecuting Attorney

2014-11-11T18:21:32+00:00

Jim Thomas
, Prosecuting Attorney

“They went overboard in providing excellent service. I was very pleased with what they provided for me as their end product. Financial Forensic Services really understands how a case needs to be put together in order to be presented to a jury. Their PowerPoint presentation tied everything together. It was thorough, it was concise, and it got the job done.”

“Joe Dickerson is the industry standard. You can measure the rest by what he does, and I say that without equivocation. Joe has incredible insight into the dark world of fraud. He understands the devious ways in which people perpetrate white-collar crime.”

Jan Schlichtman
, Attorney at Law

2014-11-11T18:20:55+00:00

Jan Schlichtman
, Attorney at Law

“Joe Dickerson is the industry standard. You can measure the rest by what he does, and I say that without equivocation. Joe has incredible insight into the dark world of fraud. He understands the devious ways in which people perpetrate white-collar crime.”

“Joe spends the time to understand the problem from the client’s perspective and from the legal perspective. He is intelligent, tenacious, willing to work as hard as it takes, thorough, well-informed, and just awfully good at what he does.”

Thomas E. Root, 
Attorney

2014-11-11T18:20:05+00:00

Thomas E. Root, 
Attorney

“Joe spends the time to understand the problem from the client’s perspective and from the legal perspective. He is intelligent, tenacious, willing to work as hard as it takes, thorough, well-informed, and just awfully good at what he does.”