WHY WOULD I GET AN "ORDER TO APPEAR FOR EXAMINATION" FROM A CREDITOR?

You could get served with such a Court order after a Creditor sued you and got a Judgment against you. Once a creditor gets a judgment, it has various means to try to make you pay the judgment amount. One of those procedures is to require you to personally appear at court to be questioned under oath by the creditor's attorney in order to get information from you about income and assets you have that could be used to pay the judgment.

The creditor's attorney files an "Application and Order for Appearance and Examination," usually at the court where the judgment was entered. A judge signs the "Order to Appear for Examination" (informally called the "Order of Examination"), which is contained on the same Application form, ordering you "to appear personally before this court" at a date and time as short as 10 days after you are served with that order.

WHAT GIVES A CREDITOR THE RIGHT TO "EXAMINE" ME ABOUT MY ASSETS?

If a creditor sues you for not paying its debt and you do not respond by the deadline stated on the summons (or you respond and the creditor still prevails), the court will enter a judgment on behalf of the creditor against you. That judgment is a formal decision by the court that you owe the money for which you were being sued. Under the law that judgment empowers the creditor to use certain procedures to force you to pay what you owe, including this right to require you to be examined in this way. The "Order to Appear for Examination" is quite direct, requiring you to appear at the court at the stated time to "furnish information to aid in enforcement of a money judgment against you."

WHO ELSE CAN BE ORDERED "TO APPEAR FOR EXAMINATION"?

People or businesses unrelated to the lawsuit but who owe you, or are in possession of, money or something else of value could also be required to appear at court through the same procedure. They would be required to appear to "answer concerning property of the judgment debtor [that's you] in your possession or control or concerning a debt you owe the judgment debtor." So if a friend or relative owes you money, or if you are self-employed, work on contract, or are in any kind of business, whoever owes you money or anything else of value could be required to answer questions about it under oath.

SHOULD I GO TO THE EXAMINATION?

In almost all situations you should personally appear as ordered. The following warning is on the back of the Order:

"NOTICE TO JUDGMENT DEBTOR. If you fail to appear at the time and place specified in this order, you may be subject to arrest and punishment for contempt of court, and the court may make an order requiring you to pay the reasonable attorney's fees incurred by the judgment creditor in this proceeding."

Of course the downside to appearing is that you could provide information there to the creditor which would enable it to take some of your assets—your car or anything else of value—or your income—future paychecks or any other stream of money—to pay towards the judgment. At the hearing the court can "order [your] interest in the property under [your] control . . . to be applied towards the satisfaction of the money judgment . . . ."

However, you may have absolutely nothing that a creditor could legally take from you with which to pay the judgment. Everything you own may be legally "exempt," protected from the reach of the creditor's judgment. Here is a list of the Current Dollar Amounts of Exemptions from Enforcement of Judgments.

If everything you own and any income you receive is in fact exempt, then the creditor may well not learn anything at your Examination that would hurt you. But there is almost always more to this than you might think. You may look at a list of exemptions and think everything you own and make is protected, but there is more to this than checking off a list. Almost certainly you could not be assured that all of your assets and income are protected without carefully reviewing your situation with an attorney experienced in this area of law.

WHAT COULD REALLY HAPPEN IF I DON'T GO?

If you don't comply with the Order by going to court when it says so, by California law the judge "may do either of the following:

(A) Pursuant to a warrant, have [you] brought before the court to answer for the failure to appear and may punish the person for contempt.

(B) Issue a warrant for [your] arrest [for] . . . fail[ing] to appear as required by the court order . . . ."

So while you can't be sent to jail for not paying a debt, you CAN be for not appearing at the court-ordered Examination. Plus the creditor's attorney's fees for preparing the paperwork and going to court would likely be added to the judgment amount. That could be a substantial amount, considering the high hourly rate charged by creditors' attorneys.

So, seriously bad things can happen if you do not attend, but you should do so only after getting legal advice about the potentially bad things that could happen if you DO attend.

HOW CAN I PREVENT ALL THIS FROM HAPPENING?

If you file a bankruptcy case, a lawsuit against you by a creditor or collection agency would be immediately stopped at any stage in the process. It's usually better to file bankruptcy to stop the lawsuit before a judgment is even entered. But if the creditor already has a judgment, and you receive ANY of the documents that come after that—a garnishment, a judgment lien, or an "Order to Appear for Examination"—a bankruptcy filing at that point would still stop the lawsuit from proceeding any further.

Specifically as to the ""Order to Appear for Examination," when you receive it you should have at least 10 days before the court appearance date. If you file bankruptcy before then, you would not have to appear at the Examination. The creditor could not ask for a bench warrant for your arrest for not appearing. Indeed, if the creditor or its attorney took such steps trying to keep collecting on the judgment after being informed about your bankruptcy filing, they could be fined for violating federal bankruptcy law.

CONCLUSION

If you are served with a lawsuit by a creditor, or with an "Order to Appear for Examination," see an attorney right away. That way you can find out which, if any, of your assets or income are at risk, and therefore whether it would be safe to attend the Examination. You would also determine which, if any, form of bankruptcy would protect any such exposed assets or income, and would perhaps solve your broader financial problems.