Creditors file lawsuits with the ultimate goal of getting a Judgment against the Defendant. If the Defendant does not file a response to the lawsuit, then the Creditor can get a Judgment by default. In some instances the Creditor can get a judgment against a Defendant even if they are unable to personally serve the Defendant with the lawsuit. Once a creditor obtains a judgment, they can execute on the judgment in a variety of different ways.
WAGE & BANK GARNISHMENTS
The most common way for a Creditor to execute on a judgment is through a wage or bank garnishment. A Creditor serves a Writ of Garnishment on your employer or financial institution, which requires them to send your money directly to the Creditor.
What most people do not realize is that, once a Judgment is entered in the same county where you own real estate, the Judgment can automatically attach as a lien on that real estate. And, even if you do not have real estate now, if you were to acquire real estate at some point in the future, that Judgment Lien will then attach to it. Once a Judgment Lien attaches to a real estate interest, there is a possibility that it cannot be removed in a bankruptcy case. If you have real estate, and are currently being sued, it is very important to act immediately before a creditor can get a judgment.
DEBTOR'S EXAMS & INTERROGATORIES
Once a Creditor gets a Judgment, they can obtain a court order for you to appear at the courthouse to ask you questions. The questions usually relate to where you work, where you bank, what other financial accounts you have, where you might have real estate located, etc. The Creditor wants to learn important information from you so they can latch on to your income or property interests. If you do not appear for the Debtor's Exam as the court has ordered, then the Creditor can petition the court to issue a warrant for your arrest--not because of the debt, but for contempt of court. Some Creditors will mail you a printed set of "interrogatories" (questions), which you are required to fill out, sign in front of a notary, and return.