Some people believe that once a judgment is entered in a debt collection case that a creditor automatically receives the money they’re due. This isn’t always the case. It’s possible that the debtor won’t pay the judgment, which may lead to the creditor having to pursue further action.
One thing that a creditor may do is to file a motion for proceedings supplementary. This allows the creditor to ask the court where a judgment was entered to help find and apply nonexempt assets toward the judgment. This option is allowed under Florida Statute §56.29, which sets specific standards for handling such matters.
How does this process work?
A motion that’s filed must clarify the judgment in question, the amount that’s still owed, any accrued costs and interests and a statement that the execution of the collection is still outstanding and valid. The focus is on any property, debts or obligations that are connected to the debtor. It can include things like money owed to the debtor or transfers that may have been made to avoid it being claimed for collections. In some cases, the property in question may be held by another party.
If it’s deemed that the case meets the legal requirements, the court may issue a Notice to Appear that requires a third party to explain why specific assets or debts owed to the debtor shouldn’t be used to satisfy the judgment.
The proceedings supplementary may also include discovery that can help to identify bank accounts, vehicles, transfers to relatives, business interests and other possible sources of payment. This can be a powerful tool for collections, but it’s limited since it only applies to nonexempt assets.
Working through the collections process can be challenging, and it can take a business owner’s focus away from running their company. It may be beneficial to work with someone familiar with these matters so they can handle the legal aspects of the collections process as efficiently and effectively as possible.
