Creditor Disclosure Subpoenas: The Basic Process

Under New York law, once a judgment has been entered for a debt, the creditor can demand information about assets that might be available to satisfy the debt from anyone that the creditor thinks may have the information. Note that the creditor has this right not just when the judgment is entered, but at any time after that until the debt has been paid off or the judgment is set aside by the court.

This process is called "disclosure" and the rules for it are set out in New York CPLR §5223 and §5224. As part of our effort to summarize all of the provisions of Article 52 of the New York Code, we will take a look at the disclosure process in this post.

Three Types of Disclosure Subpoenas

A creditor's demand for information is made through a subpoena. There are three different kinds of subpoenas a creditor can use for disclosure, 1) a subpoena for personal appearance at a deposition, 2) a subpoena to turn over documents (also called a "subpoena duces tecum" and 3) a subpoena to provide written answers to a set of written questions provided by the creditor. This is called an information subpoena. Here's a quick look at each:

I. Subpoena for Personal Appearance at a Deposition

A disclosure deposition subpoena must give the person to be deposed (called the "deponent") at least ten (10) days notice of the deposition, unless the court allows a shorter time. The deposition needs to be scheduled during business hours and is subject to the general requirements for location of the deposition and who can serve as the examiner under New York lawCre, but the deponent can waive these requirements and consent to a different location or examiner. The examiner must always be someone authorized to administer an oath (sometimes referred to as an "officer of the court.") Lawyers authorized to practice in New York are officers of the court, as are certain other individuals.

Disclosure depositions may be recorded. Although not required by the statute, it is a common practice. There can be examination and cross examination of the deponent, just as there would be for a witness in court. If the deponent does not speak English, the creditor needs to supply a translator – and pay for it.

At the end of the deposition, the creditor who requested it has the right to ask the deponent to read the deposition, make any needed corrections and sign it to certify the responses are accurate. If the deponent fails or refuses to do this, the officer of the court who took the deposition can read the responses and certify they are accurate, in which case they will be treated just as if the deponent had signed.

Deponents other than the debtor are entitled to reasonable travel expenses, a one day witness fee for appearing at a deposition and can ask for these fees to be paid in advance. However, when the debtor is deposed for disclosure, he or she is not entitled to any fees.

It's important to note that creditors need to get permission from the court to take a deposition from a debtor more than once in the same year.

II. Subpoena Duces Tecum

A subpoena to produce documents can be served on the debtor or on an individual, corporation, partnership, limited liability company or sole proprietor doing business in New York. The subpoena needs to be served in New York.

Once the subpoena is properly served, the person receiving it must produce the documents it requests. When the subpoena is to someone other than the debtor, instead of supplying the original documents requested, they have the option of supplying a transcript of the documents that are relevant to the subpoena.

It's important to note that creditors also need to get permission from the court to issue a subpoena for production of documents to the debtor more than once in the same year.

III. Subpoenas for Information

Subpoenas for information are a bit different from the other types in that they can be served through the registered mail, return receipt requested. The subpoena needs to be accompanied by a pre-addressed and postage prepaid envelope for the return of the responses. Answers in writing need to be returned within seven (7) days. Except when the subpoena is served by the state or is directed to the debtor, it needs to include a certification that the person serving it believes that the person being served has information that will assist in collecting funds to satisfy the debt.

Subpoenas that require this certification and do not include it are not enforceable and the person receiving the subpoena can make a motion to the court to quash it in the court that issued the judgment. In certain cases, usually involving corporations, information subpoenas can be issued electronically.

If you have received a disclosure subpoena and are not sure what to do, contact an attorney for advice right away. It is important to understand your rights and obligations under the law before taking any action.

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