Sen. Steele’s SB 354 the Senate on Third Reading. The bill concerns supplemental proceedings a judgment creditor can initiate when a judgment debtor fails to pay the judgment. It says the creditor can get an order requiring the judgment debtor to appear in court and testify about his or her income and assets once every six months or more frequently if the judgment creditor believes the judgment debtor’s circumstances have changed.
I don’t know for sure, but I think this is in response to language in some Court of Appeals decisions that can be read as requiring a creditor know about a change in a debtor’s financial circumstances before the creditor can bring the debtor back to court for a proceeding supplemental. Kirk v. Monroe County Tire, 585 N.E.2d 1366 (Ind. Ct. App. 1992) cited a legal treatise and an Illinois appellate court for this proposition. Carter v. Grace Whitney Props, 939 N.E.2d 630 (Ind. Ct. App. 2010) cited Kirk for this proposition. Kirk involved a situation where the debtor was bringing the debtor back weekly. There is no doubt that the court should put a stop to that kind of nonsense. Proceedings supplemental are equitable in nature and, therefore, I’d think a court would have the inherent discretion to avoid oppressive hearings. But, requiring the creditor to know the debtor has income or assets before bringing them in to testify about their income or assets is also not reasonable. The point of the proceeding, in many cases, is so that a judgment debtor can come and tell the creditor what has or has not changed about their financial situation.
This six month default rule isn’t a bad idea. I suppose I would request clarification that a proceeding can be continued to a later date (within the six month period) if the court finds that doing so is reasonable. For example, if I ask a debtor how much they have in a bank account and they say they don’t know, it would be reasonable to continue the hearing for a week to allow the judgment debtor to acquire that information and report back under oath.
” But, requiring the creditor to know the debtor has income or assets before bringing them in to testify about their income or assets is also not reasonable. ”
It doesn’t seem to me that the creditor needs to know anything about the debtor. Just bring them in every 6 months. Now if the creditor does happen to get information about the debtor then the creditor can bring him into court earlier. Seems reasonable to me.
I agree with that. The current case law can possibly be read to say that you can’t bring a debtor back in after 6 months, a year, two years or ever again unless and until you have reason to believe their financial situation has changed.