Proceedings supplemental are hearings held after a creditor receives judgment in a collection case. Although the creditor, or person who is owed money, gets a judgment against the debtor , or person who owes the money, the creditor has only received permission from the court to take steps to get the money back. The court doesn't really do anything else to collect the funds.
Proceedings supplemental give the creditor information to collect money from the debtor. The creditor needs to find out:
- Where does the debtor live
- Where does the debtor work? If they do work
- How much does the debtor make
- Does the debtor have any bank or brokerage accounts; if so, with what bank or brokerage firm
- Does the debtor own any real property
The creditor will need this information to collect against a debtor. Often, if the case was a default judgment in which the debtor never showed up in court, it will be complicated to track down this information.
What Does the Creditor Need to Do?
Proceedings supplemental give the creditor another opportunity to get the debtor into court so that the creditor can get the information needed to perfect (or collect on) the debt. To get the debtor into court for proceedings supplemental, the creditor has to submit the following to the court:
- Documentation that they own the judgment debt they seek to collect
- Proof that the plaintiff has no reason to believe that placing a lefty on the debtor will help to satisfy the judgment
- A request for the court to order the debtor to appear to provide information about the property which the creditor can execute upon
- If a garnishee is named, a statement telling the court that the garnishee has property of the debtor eligible for execution, and a request for an order to appear in court and answer questions
- Any third parties the creditor knows - banks, employers, etc. - can also be compelled to testify.
Once the creditor receives the orders, they must ensure service (delivery) to the parties named in them.
How Does the Creditor Give Notice to Those Named in the Orders
The creditor must give the people named in the order notice of the hearing time and place. This allows these individuals to attend the hearing and avoid contempt. Achieving delivery is called "service of process." Local court rules govern the ways service can be performed.
Personal Service - This is the preferred method because you can ensure service was made. It is the most effective method and the hardest to challenge. The term means personal delivery into the hands of the debtor. It was the only method allowed because it gave the recipient notice. Today there are other methods.
Substituted Service - This is anything other than personal service. The acceptable methods vary by jurisdiction.
Usually, they include delivery by registered or certified mail with delivery restricted to the addressee or sometimes, service by first-class mail when accompanied by a proof of service of process form, which must be filed with the court. Substituted service means leaving the documents with someone other than the party named in them. This is only permitted when several failed attempts at personal service have already been made. The person who receives the documents must be over 18 at the recipient's residence or a person of authority at the workplace. After substituted service, the creditor must mail duplicates to the location where the substitute service was made. Again, a service of process form, recording all of this history, must be filed with the court.
Entity to Receive Service - An entity, such as a corporation or limited liability company, can receive service through the individual designated to receive court documents on its behalf. This is an "agent for service of process" and is usually in the documents that created the entity.
Do the People Named in the Orders Have to Attend
Anyone named in one of the orders and properly served must appear in court on the date and time. Failure to attend can result in a contempt of court citation for which the individual who didn't show may be assessed fines or even spend time in jail.