Statutory Proceedings in Aid of Execution

When a creditor attempts to levy on the property of debtors to satisfy their judgments, the sheriff often finds no executable property that can be sold for the benefit of the creditor, resulting in what is called a nulla bona return. A creditor can try to find property either by searching public records or by searching the Internet, especially social networks, where the debtor may reveal what property he does have in his postings. If a creditor finds no property through such searches, then she may also use legal proceedings that compel either the debtor or a known associate of the debtor to reveal, under oath, if the debtor has any executable property and if so, its location. The creditor may also inquire about any recent transfers of property, especially to insiders—people who are relatives, friends, or business associates.

The older legal proceeding, known as the creditors' bill in equity, is a separate action from the money judgment lawsuit and is only available to the creditor with a nulla bona return or if the creditor can show that any attempts at levy would be a waste of time. The creditors' bill can also be used to execute equitable assets, which are not available through a writ of execution.

To use the creditors' bill in equity, the creditor obtains a court order compelling either the debtor or a person knowledgeable about the debtor's financial affairs to appear in court to answer questions, under oath, about the debtor's property and its whereabouts. If executable property is found, then the debtor or a transferee of the debtor's property may be prevented from disposing the property, or a receiver may be assigned to run the debtor's business or to liquidate the property for the benefit of the creditor. If the property was fraudulently transferred to someone else, then the creditor can avoid the transfer, requiring that the transferee either return the property or to pay its value in cash.

The creditors' bill in equity has been largely superseded by the statutory proceedings in aid of execution which can be integrated into the original lawsuit rather than pursued as a separate action, saving time and money for the creditor. In some jurisdictions, examination or discovery can be used even before the issuance of a writ of execution; other jurisdictions still require a nulla bona return or an affidavit by the creditor affirming that attempted execution would be futile. In addition to the other remedies provided by the creditors' bill in equity, the statutory proceedings also allow the judge to order the payment of the debt in installments.