Assets are everything in the judgment collection arena. They represent leverage a creditor can utilize to encourage the debtor to pay up. Both sides know this, which is why judgment debtors sometimes go to great lengths to hide their assets. If you are a judgment creditor facing this sort of scenario, is there anything you can do? Absolutely.
1. Take Advantage of the Legal System
First and foremost is taking advantage of every legal avenue available to you. Your legal options will differ based on state law. However, here is a general guideline for the legal options most states recognize:
- Supplemental Proceedings – Judgment creditors can typically open supplementary proceedings to force asset disclosure. In other words, a creditor asks the court to preemptively protect assets he believes the debtor will try to sell, transfer, etc.
- Discovery Under Oath – Next up is the option to compel the debtor to show up for a hearing during which he will produce relevant documents and answer questions. All information is provided under oath.
- Court Injunctions – A creditor who has proof of hidden assets can request an injunction from the court. An injunction would freeze the named assets or open the door to filing judgment liens against them.
- Fraudulent Transfer Claims – In most states, it is against the law to transfer assets in order to protect them against lawful collection efforts. Doing so is considered fraud. A creditor with proof of such a transaction can file a fraudulent transfer claim to undo it.
All the options listed here require at least a basic understanding of how the system works. A lack of knowledge leads directly to the second option: hooking up with a debt collection agency or an experienced collection attorney.
2. Bring in Professionals
Collection agencies and attorneys are the specialists here. Take Salt Lake City’s Judgment Collectors. Their business model is based exclusively on helping clients in nearly a dozen states collect outstanding money judgments. Money judgment cases are all they work on. Their level of expertise is unparalleled.
What does this have to do with debtors trying to hide assets? Everything. A collection agency’s team members possess expertise in different areas. One team member might be an expert at scouring public resources, like property records and court filings. Another might be a social media expert. Meanwhile, a third staff member is an expert in skip tracing.
Collection agencies have access to a selection of public resources and private databases. If anyone can find hidden assets, they can. Some collection agencies are so good that they only need a little bit of information to find who and what they are looking for.
3. Dig Around Yourself
As a creditor, you can always dig around for hidden assets yourself. Property records are public records. Ditto for any other records compiled by the government. If you know where to look and what to look for, public records are a treasure trove of information.
Careless social media practices open the door to even more information. You can learn a lot about a debtor’s financial position by paying attention to what he posts online. The right information could point you to public records verifying certain assets you might want to go after.
A judgment debtor attempting to hide assets is neither abnormal nor new. It is a practice as old as civil litigation itself. Fortunately for judgment creditors, they don’t have to stand for it. There are ways around debtor strategies for protecting assets. As a creditor, you either learn them yourself or bring in a collection agency.