By Stephen J. Muhonen, Creditor’s Rights / Collections Attorney, Racine Olson, PLLP
I have been practicing law for almost 17 years. Throughout this time I cannot tell you how many times I have been contacted by creditors/judgment holders, asking to retain me so as to have their debtor sat down and grilled as to what assets they have and where are the assets at. Though I understand the creditor’s desire to have its debt satisfied and be made whole, unfortunately, or perhaps, fortunately, there is a process in place that must be followed in order to give force and effect to the collection process.
Following the issuance of a judgment, the judgment creditor certainly expects to be paid what they were awarded by the court. When the debtor refuses to pay, the next step available to the judgment creditor is to obtain a writ, so as to be able to garnish or execute upon the debtor’s property. This part of the process can be troublesome because oftentimes the judgment creditor does not know where the debtor is employed, nor where the debtor does its banking, nor do they know whether the debtor owns any vehicles, or if they own any real property, or who the debtor’s debtors are. That is the purpose of a debtor examination; to hopefully find out all of this information. However, judgment creditor beware. You can’t just obtain your judgment and then go straight to a debtor exam.
Idaho Codes §§11-501 and 11-502 provide that after a writ has been returned unsatisfied, then a judgment creditor can seek a court’s order, compelling the judgment debtor to submit to a debtor exam. Said otherwise, the judgment creditor must first attempt to collect on the judgment and receive an unsatisfied return on the writ from the Sheriff before being able to sit the judgment debtor down and question them about their property. This debtor exam is done pursuant to an order to appear, issued by the court, and must take place in the county where the debtor resides. If the creditor has sufficient evidence that the judgment debtor is a danger of absconding, then the creditor can obtain a court order to have the debtor detained to ensure his/her appearance. At the debtor exam, pursuant to Idaho Code §11-506, property or money in the debtor’s possession that is not exempt can be seized and applied towards satisfaction of the judgment.
Idaho Codes §§11-503 and 11-504 allow a creditor to look to the debtor’s debtor to satisfy the outstanding judgment, however, the debt owed by the debtor’s debtor to the debtor must exceed $50.00. Said otherwise, “Pay me, not him.” These statutes also allow for the examination of the debtor’s debtor, after the writ has been returned unsatisfied, as with the original judgment debtor. Idaho Code §11-507, too, allows a judgment creditor to attempt to satisfy its judgment by collecting property or money from the debtor’s debtor. If the debtor’s debtor refuses to pay over as demanded, the judgment creditor can initiate an action against the debtor’s debtor, as well as obtain a court order, precluding the debtor’s debtor from transferring the property until an action can be commenced and prosecuted to judgment.
In the event the judgment debtor or its debtor refuses to attend a debtor exam as ordered, they can be held in contempt pursuant to Idaho Code §11-508. This means the debtor can be incarcerated to answer for his/her disobedience of the court’s order.
If you are a creditor seeking assistance in collecting a debt that a debtor is refusing to pay, give Stephen Muhonen at Racine Olson, PLLP, a call at 208-232-6101. You can also email Steve at firstname.lastname@example.org