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The Fifth Amendment And Judgments
This article is my opinion, and not legal advice. I am a judgment broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.
Generally, judgment debtor examinations are intended to have the "widest scope of inquiry in the search for assets to satisfy the judgment". Generally, "Leave no stone unturned" applies, and creditors are much less susceptible to relevance objections if they can show a connection between their questions and the debtor's assets.
The Fifth Amendment, ratified in 1791, includes a provision that no person may be forced to testify as a witness against themselves in a criminal matter. Fifth Amendment protection requests are much more likely to be heard in criminal courts, however sometimes they are also heard in civil courts.
Until the possibility of a criminal charge arises (with the district attorney's office or the police involved), within a court; creditors are usually free to ask almost anything they want. Usually, a debtor may only successfully claim their privilege against self-incrimination if there is an imminent threat of prosecution for a crime. The 5th Amendment only defends against self-incrimination, and is not a right not to answer a question in civil court. Judges may compel debtors to answer questions in situations where the debtor is attempting to thwart the creditor.
In a criminal case, the defendant or their attorney can ask for a recess, then go to the prosecutor's office, and get a 5th Amendment waiver from the prosecution, to reduce their likelihood of self-incrimination.
In civil courts, if a judgment debtor uses the 5th Amendment as the reason not to answer your question(s) at an examination, they must next speak with the judge. As the creditor, you can then politely ask the judge to review your question(s), and have the judgment debtor explain why your questions might be prejudicial to their 5th Amendment rights in the civil judgment debtor examination. Then, the judge will either:
A) Remind the debtor this is a civil proceeding, not a criminal case, and the judgment debtor cannot assert their 5th Amendment rights unless they allege that revealing the information would cause a criminal case against them.
B) Grant the debtor's 5th amendment request only for specific questions. Whether a specific Fifth Amendment request will be denied or approved, cannot be predicted. It is always determined on a case-by-case basis, depending on the unique facts and circumstances surrounding each question.
A Fifth Amendment claim can be asserted in any proceeding; civil or criminal, administrative or judicial, investigatory or adjudicatory. A judgment debtor cannot successfully make a "blanket assertion" of their Fifth Amendment rights. However, for some particular questions that do involve admitting to a criminal offence, the Fifth Amendment objections are regularly upheld, even in post-judgment proceedings.
Even when a judgment debtor fails an attempt to assert their 5th Amendment right, their refusal to answer your question will rarely result in a contempt ruling. Even when the reason for a certain course of action is completely without merit, a person's good faith belief in its meritorious nature, even if not successful, will rarely become a red flag for contempt. However, a fair judge might become angry at debtors attempting to abuse the 5th Amendment's purpose, only to thwart their creditor.
Even when the court orders the judgment debtor to answer a question after they have asserted their 5th Amendment right, the debtor can later file an appeal; and delay the proceedings for a long time, which makes it likely the judgment will settle at a steep discount. If the debtor's 5th Amendment-related request is granted, the creditor can probably later take the issue up again at some appeal-type hearing, having to spend more time and money.
In Troy vs. Superior Court (1986) 186 Cal. App. 3d 1006, the Court of Appeals said that in order for a judgment debtor to claim the 5th in a debtor examination, a "real danger" must exist, not merely speculation. This case was followed by Hooser vs Superior Court (2000) 84 Cal App 4th 997.
A 5th Amendment claim is harder to argue in family court support matters, see Marriage of Sachs, 95 Cal. App. 4th 1144 (Cal. Ct. App. 2002). A review of this case was denied by a Supreme Court. Also, in California, as per CCP 708.130, the spousal privilege does not apply in an examination proceeding.
Many judges are liberal in granting 5th Amendment objections whenever possible. Attorneys have successfully argued in bankruptcy courts, on behalf of judgment debtor clients having offshore accounts; to block certain individual questions where their answers could be used to indict the debtor for bankruptcy fraud.This is a shield that crooks hide under.
Consider a typical debtor examination question: "Do you have any offshore accounts?" Your debtor might have a Swiss bank account which they failed to report to the IRS. If they answer "Yes", then that could expose them to criminal prosecution for tax evasion; so they might reply, "I refuse to answer that question under the Fifth Amendment". Although it is not fair to creditors, most judges would not force the debtor to answer that question.
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