Effective September 1, 1998, the holder of an unsatisfied judgment in New Jersey will be permitted to issue an Information Subpoena to a banking institution in the state, that will require the banking institution to identify any accounts maintained by the judgment defendant. Previously, the holder of an unsatisfied judgment could obtain information about the defendant's assets from third parties only by petitioning the Court to enter an Order for Discovery. No infrequently, the Court would refuse to enter such an Order unless the plaintiff could establish a reasonable basis to believe that the bank had accounts of the defendant, thereby leaving many judgment holders in a classic "Catch-22" situation.
This new rule change provides a useful and inexpensive means to locate the most desirable of all assets for purposes of execution--cash. The subpoena must be accompanied by a certification that the judgment defendant has failed to fully answer an Information Subpoena directed to the defendant, that the Information Subpoena is reasonably necessary to effectuate a post-judgment judicial remedy, and that the bank may have in its possession information abut the debtor that will assist the creditor in collecting the judgment. This requirement is obviously intended to assure compliance with the Fair Debt Collection Practices Act, which limits communications with third parties about consumer debt.
The rule change does not address the bank's right to be reimbursed for its costs incurred in order to comply with the subpoena. It appears that current law supports a bank's right to charge a fee, not only for the cost for reproducing any records it may have concerning a defendant's accounts, but also for the cost of searching its records to determine if the defendant has any active accounts with the bank.
Questions about this important development and how it may be successful employed can be directed to Thomas A. Clark at the firm's address or online at tclark@ccclaw.com