This post isn’t about bankruptcy, but it’s about something that a lot of people who are deciding to file bankruptcy deal with. What happens after you stop paying a debt? The basic timeline of debt default goes like this (if one does nothing):
1. Stop paying debt;
2. Calls from original creditor;
3. Debt transferred to debt collector, calls from debt collector start;
4. Lawsuit summons arrives;
5. Default judgment enters against you;
6. Supplementary process proceeding filed;
7. Arrest warrant (“capias”) issued.
Again, this is what usually happens if you do nothing. (Note: wage garnishment proceedings can also start at step 6 if you are employed.)
What we find is that even the last holdouts usually spring to action at step 4-6. Many of our bankruptcy clients come to us during those steps, so it’s never too late: Absent unusual circumstances, a bankruptcy discharge will discharge even your debt lawsuit judgments. However, most of our clients see the writing on the wall earlier on, and wishing to avoid the steps above, get started at the beginning stages of default or before.
So, what about steps 6-7, which is what this post is really about? Supplementary process is a new case filed to enforce a judgment. It has nothing to do with whether or not you owe the debt, which has already been established by the judgment, but it instead asks the question, “what can you pay?” The law is here, G. L. c. 224, § 14, for those wanting to read it. Just like regular lawsuits, a supplementary process suit starts with a summons served onyou. However, this summons is different than the original lawsuit summons (step 4 above). You can ignore an original lawsuit summons and the only effect will be that judgment enters against you, but if you ignore a supplementary process, a capias warrant will issue.
It goes without saying that people don’t like arrests warrants or being arrested. Most people with debt problems have legitimately fallen on hard times. They are otherwise law-abiding citizens, and not criminals. Being the subject of an arrest warrant usually scares them a great deal. Although some of this fear is inevitable, a capias warrant, though serious, is a civil arrest warrant basically seeking to force your into court for skipping the supplementary process hearing. If you don’t skip the supplementary process hearing in the first place, you won’t be subject to a capias; even if you do get a capias, you can arrange to cooperate with the sheriff’s office or constable and voluntarily go to the next supplementary process hearing date. Once you comply with the summons, this “purges the contempt” and the effect of the capias is no more. Usually you’ll get a call from sheriff giving you one last chance to voluntarily appear before you’re arrested.
So, what happens at supplementary process–whether you end up going before or after a capias warrant issues? The bottom line is that at a supplementary process hearing the court determines what you should pay on the judgment. If you truly cannot pay anything–like if your only income is social security and you have no substantial property–the court is supposed to dismiss the supplementary process case with the priviso that the judgment creditor can bring it forward again in a year. If, on the other hand, you do have sufficient income to make a payment, the court will simply order you to pay what it considers appropriate. Any violation on this payment order can result in additional contempt proceedings (and a new capias). Bankruptcy end up being very popular at this point because it trumps all of the supplementary process payment orders and proceedings.
When you’re first called at the supplementary process hearing, the judge or magistrate is first likely to ask you to negotiate in the hallway with the lawyer representing the judgment creditor. Courts prefer when you can come to an agreement on a payment arrangement. They would prefer not to have to examine you and decide the matter. However, you can always decline to come to terms with the lawyer and go back and roll the dice in front of the judge.