Can A Judgment Debtor Exam Order Help You Collect?

Can A Judgment Debtor Exam Order Help You Collect?

The short answer is “Yes.”

What is A Judgment Debtor Examination Order?

A judgment debtor examination order (sometimes called an “ORAP”) is an order that you can get from the court after you obtain a judgment.   With this ORAP, the court sets a date for the judgment debtor to have to come into court and answer questions about their assets so your lawyer can then take steps to obtain those assets and get you paid on the judgment.  Your lawyer can ask about all the debtor’s assets, including bank accounts, stock accounts, real estate, intellectual property, or any other assets.  Your lawyer also can ask the debtor if anyone else (such as customers) owe them money because you can collect on those too.

How Do You get an ORAP?

Your lawyer files for an ORAP or judgment debtor examination order with the court.   The court will then set the date.   The lawyer then has to have the debtor served with the ORAP papers.  The papers will order the debtor to come to court on the day listed for the ORAP.

However, there is also one other very important advantage of a judgment debtor examination order.   Once the debtor is served with the ORAP papers, the creditor now has a lien on all personal property of the judgment debtor.   What does that mean?   That means that if the debtor transfers property or money to someone else, the creditor now has the right to go after that third party to collect on the money that the debtor transferred to the third party.   Here’s an example.   Joe has a judgment for $100,000 against Jill.    Joe serves an ORAP order on Jill.   Meanwhile, Jill decides to transfer $100,000 to her Aunt Mable to try to stop Joe from getting the money.   Because Joe had a lien on all of Jill’s property after he served the ORAP order on Jill, Joe now can get an order that Aunt Mable give him the $100,000 that Jill transferred to Aunt Mable.   Pretty powerful, right?

What Happens At the ORAP?

At the ORAP, a deputy or a clerk makes the debtor take an oath to tell the truth.    The creditor’s lawyer and the debtor then go someplace close (meeting room, cafeteria in the courthouse or, sometimes, even a bench in the courtroom hallway).   The lawyer then asks the debtor questions about the debtor’s assets.   In some cases, if the debtor has assets on his or her possession (such as cash in their wallet or a watch)  the lawyer can get an order from the judge that the debtor turn over those assets to the creditor’s lawyer.   Depending on the courtroom, when the creditor’s lawyer is done questioning the debtor, they return to the courtroom.   Sometimes, if the debtor was supposed to provide documents and did not, another date is set for another judgment debtor examination.

What Are the Advantages of an ORAP?

There are many advantages to obtaining a judgment debtor examination order.   First, as explained above, when the debtor is served with the order, the creditor obtains a lien on all of the debtor’s personal property.   Second, after receiving the ORAP papers, many debtors would prefer to try to settle the case rather than go to court and, this of course, encourages them to settle with you.   Third, sometimes, the creditor’s lawyer can learn about the debtor’s assets.  Why isn’t this the first advantage of an ORAP?   Read on and we’ll explain.

What Are the Disadvantages of an ORAP?

There are three main disadvantages.  First, like many judgment enforcement mechanisms, sometimes serving a debtor with ORAP papers prompts them to file for bankruptcy.   Second, and perhaps most importantly, debtors lie.   Despite being sworn to tell the truth, the whole truth and nothing but the truth, debtors are very, very unlikely to do so, at least about their assets.  Third, if you’re paying your lawyer by the hour to collect on your debt, because debtors lie, this could be a great waste of time and money.

Should I Have My Lawyer Obtain A Judgment Debtor Examination Order?

If you are trying to collect a judgment, it’s helpful to know what an ORAP or judgment debtor examination order is. There are many reasons why a judgment debtor examination order may be helpful to you in collecting your judgment.   As explained above, however, there also are disadvantages.  Whether or not it would work for you to collect your judgment depends on the facts of your case.   That is why you should discuss this with your experienced collections lawyer.

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