Creditor's Bill

Creditor's Bill

An equitable proceeding initiated by a person who has obtained—and is entitled to enforce—a money judgment against a debtor to collect the payment of a debt that cannot be reached through normal legal procedures.

A plaintiff might, for example, win a lawsuit against a defendant whereupon the defendant might be ordered to pay damages. In the event that the defendant does not pay promptly, the usual way for the plaintiff to obtain payment is to pay a certain designated fee to the sheriff who would seize the defendant's property, sell it, and pay the plaintiff with the proceeds. If, for example, the defendant only has property that is worth less than the plaintiff's judgment, the plaintiff creditor might pursue the defendant's rights to collect money from others. The person can then initiate a creditor's bill, also known as creditor's suit, requesting that the court authorize a way to obtain the money affected by such rights. Such funds as those that come from corporate stock, Annuity checks, growing crops, and money owed to the debtor from another person can all be subjected to creditors' suits. A creditor's bill cannot, however, be used to obtain a liquor license, property in another state, or future unearned wages or salary.

References in periodicals archive ?
For example, unlike Florida, where the word "reach" is not defined, South Dakota Codified Laws [section]55-1-24(6) states a creditor cannot reach assets in a discretionary trust and defines reach as follows: "[T]o subject the distribution to a judgment, decree, garnishment, attachment, execution, levy, creditor's bill or other legal, equitable, or administrative process, relief, or control of any court, tribunal, agency, or other entity as provided by law.
The common law procedure for discovering and executing on a judgment debtor's assets was through a creditor's bill in chancery, through which a creditor suing a debtor at law could institute a parallel equitable proceeding to enjoin the fraudulent disposition of the debtor's property prior to the debt being reduced to judgment.
29 codifies the formerly equitable proceeding for a creditor's bill, no jury trial right attaches in a supplemental proceeding.