What is a debtor’s exam?

A debtor’s exam is a legal procedure under California Creditor’s Rights Law that allows creditors to examine the financial situation of a debtor to determine if they have the ability to pay the debt they owe. In this exam, creditors will ask debtors a series of questions and require the production of financial documents, such as pay stubs, bank statements, and tax returns. This information gathered from the exam allows creditors to determine whether the debtor has the means to fully or partially satisfy the debt they owe. The debtor can be required to appear in debtor’s court in person or submit a sworn declaration, which is like a written sworn statement that the debtor is providing under penalty of perjury. If the debtor fails to appear or provide a sworn declaration, they may face legal consequences. The debtor’s exam is a powerful tool for creditors, who can use the financial information to recover by garnishing wages, levying bank accounts, or filing a lien against property. It is important for debtors to understand their rights in this process and to seek legal advice if necessary. The debtor’s exam can be a stressful process, but it is the best way for creditors to ensure they will be able to recover their money.

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What is a debtor’s exam?

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