Discovery in Aid of Execution: Post-Judgment Asset Discovery...

Introduction

Discovery in aid of execution is the set of legal tools used after a court enters a money judgment to find a judgment debtor’s assets. In short, it is how a judgment creditor gets the information needed to collect. In federal court, Rule 69 of the Federal Rules of Civil Procedure allows a creditor to use both federal discovery methods and the post-judgment procedures of the state where the court sits. Each state also has its own statutes that make post-judgment discovery broad and effective.

This guide explains what discovery in aid of execution is, how it differs from pre-trial discovery, which tools are available, and the practical steps to move from information to collection. You’ll also see common issues, limits, and real-world examples of how creditors use these procedures—alongside what debtors should expect and how to respond.

What You'll Learn

• The legal basis for post-judgment discovery under FRCP 69 and state law
• How written interrogatories, document requests, depositions, subpoenas, and debtor examinations work
• When and how to seek records from banks, employers, and other third parties
• What to do if the debtor hides assets or uses fraudulent transfers
• Key limits: privilege, the Fifth Amendment, privacy rules, and proportionality
• How exemptions and wage garnishment limits affect what you can collect
• The path from discovery to collection: liens, writs, garnishments, levies, turnover orders, and receivers
• Practical steps for creditors and response options for debtors

Core Concepts

Legal Basis and Scope

• Federal courts: FRCP 69(a)(2) permits a judgment creditor to obtain discovery from any person, including the judgment debtor, using either the federal rules or the procedures of the state where the court sits.
• State courts: Most states give creditors sweeping authority to ask about “any matter relevant to the satisfaction of the judgment.” Examples include:
  • New York CPLR 5223 (full disclosure of all matter relevant to satisfaction of the judgment)
  • New York CPLR 5224 (subpoenas)
  • California CCP 708.110 (order for examination of judgment debtor)
  • Texas TRCP 621a (post-judgment discovery)
• Pre- vs. post-judgment: Post-judgment discovery is focused on finding assets, income, and property interests, not liability. It targets what exists now and where it can be reached.

What counts as “assets” for collection?

• Bank accounts, safe deposit boxes, cash equivalents
• Wages and other earnings (subject to limits)
• Real estate and personal property (vehicles, equipment, valuables)
• Accounts receivable and contract rights
• Business interests (stock, LLC interests)
• Intellectual property and royalty streams
• Digital assets (payment accounts, crypto, domain names)

Common Post-Judgment Discovery Tools

• Interrogatories: Written questions answered under oath about assets, income sources, accounts, properties, and transfers.
• Requests for production: Demands for bank statements, tax returns, balance sheets, titles, deeds, membership agreements, and insurance policies.
• Depositions: Sworn testimony of the debtor or third parties (employers, bookkeepers, bankers, business partners) with document exhibits.
• Subpoenas: Orders to third parties (banks, payroll processors, brokerage firms, title companies) to produce records or appear for deposition. In federal court, use Rule 45.
• Debtor’s examination: A court-ordered appearance where the debtor answers questions and brings documents. Called a judgment debtor exam, order of examination, or supplemental proceedings depending on the state.
• Requests for admission: Less common but useful to pin down facts about ownership interests or transfers.

How it connects to collection:

• Information from these tools supports writs of execution, bank levies, wage garnishments, liens, turnover orders, charging orders (for LLC interests), and receiver appointments.

Third-Party Discovery and Financial Records

• Banks and brokers: Subpoena account statements, signature cards, wire records, and safe deposit box logs. Some states allow “information subpoenas” to banks listing all accounts tied to a Social Security Number or EIN.
• Employers and payors: Confirm employment, earnings, and benefits for garnishment. Verify 1099 payors for independent contractors.
• Public records: Search real estate records, UCC filings, court dockets, vehicle registrations, professional licenses, and business entity filings.
• Professionals and insiders: Accountants, bookkeepers, business partners, and family members may hold relevant records or knowledge of transfers.
• Digital leads: Payment platforms, domain registrars, and online marketplaces can show revenue streams. Follow applicable law and use proper subpoenas; do not resort to pretexting.
• Privacy considerations: Request only what is reasonably related to collection, redact sensitive data (full SSNs, account numbers) where appropriate, and use protective orders when needed.

Limits, Objections, and Consequences

• Relevance and proportionality: When you use the federal rules, FRCP 26(b)(1)’s proportionality standard applies. State rules often allow very broad inquiry but still require reasonable scope.
• Privilege and privacy: Attorney-client privilege and work product apply. Medical and tax privacy concerns can be addressed with tailored requests or confidentiality orders.
• Fifth Amendment: A debtor may refuse to answer if a truthful response could be self-incriminating (for example, regarding fraudulent conduct). Courts balance this with the creditor’s need for non-testimonial records.
• Protective orders: Either side can seek to narrow topics, limit time or place, or require confidentiality for sensitive material.
• Noncompliance: Courts can compel answers, shift fees, and hold a noncompliant party in contempt. Repeated refusal to appear for a debtor’s exam can lead to a bench warrant in some jurisdictions.

Exempt Property, Priorities, and Special Paths

• Exemptions: Federal and state law protect certain assets (for example, most Social Security benefits, many retirement accounts, part of wages, and homestead interests in some states).
• Wage limits: Under 15 U.S.C. § 1673, federal law generally caps garnishment at the lesser of 25% of disposable earnings or the amount by which weekly wages exceed 30 times the federal minimum wage. States may be stricter.
• Priority: Tax liens, perfected security interests, and earlier judgment liens may come ahead of you. Record your judgment lien promptly where allowed.
• Business interests: A charging order may be the remedy for LLC membership interests. Stock can be levied. Professional practice interests may have special limits.
• Fraudulent transfers: If the debtor moved assets to others to avoid collection, look to the Uniform Voidable Transactions Act (or similar state law) for claims to unwind those transfers.

Key Examples or Case Studies

Smith v. Doe

• After a monetary judgment, the creditor served post-judgment interrogatories and took the debtor’s deposition. The responses identified two bank accounts and a rental property. The creditor obtained a writ, levied the accounts, and served a wage garnishment on the debtor’s employer. Proceeds from the levy and garnishment paid down most of the judgment, and a lien recorded against the rental property secured the rest.

Johnson v. Brown

• In a personal injury case, the plaintiff’s attorney issued subpoenas and requests for production to locate investment accounts and valuable personal property. Brokerage statements and appraisals showed reachable assets. The court later granted a turnover order directing the debtor to deliver non-exempt investment funds to the sheriff.

Thompson v. Green

• Following a business dispute, the creditor moved to compel financial disclosures and conducted a debtor’s exam under oath. Questioning revealed shares in a closely held corporation and two luxury vehicles. The court authorized levy on the vehicles and a charging order on distributions from the corporation, which satisfied the remaining balance over time.

Anderson v. Fernandez

• In a contract case, subpoenas to banks and depositions of third parties showed that the debtor moved funds to relatives during the lawsuit. The creditor filed a separate action under the state’s voidable transfer statute. The court set aside the transfers and ordered turnover of the assets to satisfy the judgment.

Note: These examples illustrate common procedures and outcomes. They are not reported opinions.

Practical Applications

For judgment creditors: a workable sequence

1. Confirm your judgment status

   • Is it final? Has the appeal period expired? If from another state, domesticate it under your state's version of the Uniform Enforcement of Foreign Judgments Act.
   • Docket or record the judgment as required so you can create liens.

2. Plan your discovery

   • Start with written interrogatories and document requests tailored to banks, income, real estate, vehicles, business interests, and transfers within the last 3–5 years.
   • Calendar deadlines and meet-and-confer dates. Keep requests specific to collection.

3. Use third-party subpoenas early

   • Send Rule 45 (or state equivalent) subpoenas to banks, employers, payroll processors, and brokerages. Consider title companies and property managers.
   • Cross-check subpoena returns against the debtor's answers for gaps or inconsistencies.

4. Schedule a debtor examination

   • Seek a court order for the debtor to appear with documents. Prepare an outline covering assets, entities, trusts, transfers, and passwords for online financial accounts (without requesting credentials).
   • If the debtor fails to appear, move to compel and request appropriate sanctions.

5. Convert information into recovery

   • Bank levy: Use account details from records to target specific branches as required by state law.
   • Wage garnishment: Verify employer and confirm limits under federal and state law.
   • Liens and writs: Record real property liens; seek writs of execution for personal property.
   • Turnover orders and receivers: When assets are in the debtor's control or a business resists, request a turnover order or ask the court to appoint a receiver.
   • Charging orders: For LLC interests, pursue a charging order for distributions.

6. Address concealment or transfers

   • Compare deposits and withdrawals to income records. Look for transfers to insiders.
   • If needed, file claims under your state's voidable transfer statute and seek provisional relief (for example, restraining orders or asset freezes consistent with state law).

7. Close the loop

   • Track amounts recovered and any remaining balance, including post-judgment interest.
   • If nothing is collectible now, calendar renewal deadlines and recheck assets later.

For judgment debtors: smart response steps

• Respond on time and truthfully. Noncompliance can lead to court orders, fees, or contempt.
• Bring requested documents to debtor exams. If you need more time or scope is too broad, ask the court for a protective order.
• Assert applicable privileges and exemptions. Use required forms to claim exemptions and be ready to show proof (pay stubs, benefit letters, retirement plan details).
• Consider payment plans or settlement. Courts often look favorably on reasonable proposals supported by current financials.
• Do not transfer assets to avoid collection. That creates new legal exposure and may be undone.

Compliance and professionalism

• Keep requests tied to collection needs.
• Use confidentiality orders for sensitive data.
• Avoid contact that could be seen as harassment; keep communications through counsel when possible.

This material is for general information only. Laws vary by state, and specific steps depend on your court and your case.

Summary Checklist

• Know your authority: FRCP 69 plus your state’s post-judgment rules
• Choose tools: interrogatories, document requests, depositions, subpoenas, debtor exam
• Subpoena third parties early (banks, employers, brokers, accountants)
• Prepare for objections: privilege, Fifth Amendment, privacy, proportionality
• Use court remedies for noncompliance: motions to compel, sanctions, contempt
• Verify exemptions and wage limits before levies or garnishments
• Turn information into action: writs, liens, levies, garnishments, turnover, receivers
• Watch for transfers to insiders and use voidable transfer claims when needed
• Keep a recovery log and update balances with post-judgment interest
• Debtors: respond, claim exemptions properly, and avoid risky transfers

Quick Reference

Related terms: Show Cause Order, Counterclaim, Motion for Substitution of Parties, Memorandum of Law, Third-Party Defendant.