How Often May Judgment Creditor Depose The Debtor?
An prior year’s asst protection client called to complain that one of his judgment creditors had scheduled a deposition in aid of execution (collection) for the second time in two years. The client asked whether the creditor can depose him a second time.
Yes- there is no limit to how many times a judgment creditor can depose the debtor in its search for non-exempt assets so long as the creditor’s collection tactics do not amount to unreasonable harassment. A debtor’s assets change over time. Debtor’s accumulate new assets which may be non-exempt. Debtors may sell exempt assets and convert the asset to non-exempt cash. I do not think it unreasonable for a judgment creditor to reexamine a debtor’s assets on an annual basis. More frequent discovery into certain debtors finances may be reasonable where the debtor has multiple types of assets or is actively buying and selling assets.
My experience is that courts will support creditors discovery in aid of judgment execution at least twice per year. Most creditors will not spend money with frequent discovery over an extended period of time if their initial efforts to not recover money to satisfy part of their judgment.
About the Author
Jon Alper is an expert in asset protection planning for individuals and small businesses.
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