Is a Trust Attachable In Judgment Enforcement?

This is a good question posed to me by a judgment creditor “Is a trust attachable in judgment enforcement?”  My friend, Mike, wanted to know.  He won a money judgment in civil court.  He had become aware that his judgment debtor had a significant amount of money being held in a trust.  Mike wanted to know if he could legally access the funds in the trust so that he could receive payment of his judgment.

The answer to Mike’s question is likely of interest to many other judgment creditors.  To tell you the truth, I suspect that most people have no idea whether or not a trust can be tapped to pay off a money award.  The correct answer is maybe.

There are several factors which determine the answer as it relates to any particular trust.  The factors can vary by state and jurisdiction.  The first thing is to realise that the laws, and rules of procedure that apply to a trust and judgment execution are not the same from state to state.  Make it a point to thoroughly investigate the applicable rules and statutes.

You can access the statutes of all 50 states at this link.

Another basic item to consider is that there are many types of trusts.  Some may be attached and others not.  Generally for a trust to be seized for payment of a judgment, it must be a revocable trust in which the judgment debtor has a beneficial interest.  By the same token, an irrevocable trust probably cannot be seized.

If a judgment debtor’s assets are moved into a trust under circumstances that can be ruled a fraudulent transfer, then the court may allow those assets to be seized no matter what kind of trust is involved.

Sometimes it can be difficult to determine for sure whether your judgment debtor is truly a beneficiary of a particular trust.  Public records of some trusts will only list the person who is the trustee while keeping the beneficiary anonymous.  It may be possible in those cases to get a court order or subpoena in order to have the actual beneficiary unmasked.  If the trustee and beneficiary want to fight it out in court then they may make it legally more difficult to discover the beneficiary.  However that certainly does not mean they will ultimately succeed in hiding the identify of the person having a beneficial interest.

Of the various reasons to create a trust, one of them would be to make it more difficult for anyone to reach the assets of the trust.

Can trust assets be reached by execution of a money judgmentIt does happen.  Sometimes, it is simple to accomplish.  Other times it can be difficult or impossible.

One would be wise to invest a little time and money with a well qualified attorney who has previously succeeded in attaching trust assets to help wade through the complexities of the subject.

I would encourage my friend Mike or anyone with a judgment to consider the possibilities of seizing judgment debtor assets held in a trust.  It might be the best source of debtor money which could pay the judgment debt.

In your post judgment asset investigation don’t fail to uncover any trusts.  Good luck.

Bryan

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Hide and Seek: Judgment Enforcement

Hide and Seek is a fun game for kids.  What do “hide and seek” and judgment enforcement have to do with each other?

I have a couple of granddaughters ages 2 and 4.  When they come over to the house they love to play hide and seek with me.  We take turns hiding and also take turns being the seeker.  It is a ton of fun for all of us.  I wouldn’t take a million dollars for the experiences I have getting to play this game with my precious girls.  They love to play the game with me as much as I enjoy playing it with them.

When it comes to judgment enforcement, there are elements that remind me very much of playing hide and seekEnforcing judgments can be a ton of fun as well.

In judgment enforcing we judgment creditors are obviously the seekers, and our judgment debtors are the hiders.  Stubborn debtors frequently are bound and determined not to be found.  They can be real tough nuts to crack when it comes to trying to discover their whereabouts.  I have figured out that some debtors have pretty much made a living out of being difficult to locate.  They don’t want to be found, and they do everything in their power to cover their tracks.  It can be quite an experience of hide and seek trying to find out where they live or hang out, and where they work.

The really crafty judgment debtors make every attempt to not only be hard to find, they also do everything imaginable to make their assets and income sources hard to find.  Many sneaky debtors go to extremes in hiding assets.  It is quite common for many of them to illegally hide assets.  They engage in everything from fraudulent transfers to many other forms of deception in order to shield their money and executable assets from their creditors and the court.  It can make my post judgment investigation a bit more difficult as I seek to find who and what is hidden.

When we have judgment obligors who go to such great lengths to hide themselves or their valuable stuff, it can frustrate us to no end.  The best way that I have found to encourage myself while dealing with these situations is to make the job of locating my debtor and his assets into a game of hide and seek.  Rather than letting my adversary put me in a state of depression, I determine in my own mind to have fun while pursuing my goal.  I treat it all like a game.

Make no mistake about it, I am determined to win the game.  I intend to collect all of the judgment debt that is owed to me.  But, I have no intention of letting a judgment debtor’s guile and trickery control my emotions.  Life is too short.  I will play the hide and seek game with my debtor if that is the direction he chooses.   I will not quit till the game is over.  As I said, I am determined to win the game!

Here is a link to an article I wrote back in 2010 about how I treat the judgment enforcement process as a game.  I think you’ll enjoy it.

Wishing you the best in your seeking the one who is hiding from you and the assets he is attempting to hide.

Bryan

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Intellectual Property as Executable Asset

Property which is subject to post judgment execution in enforcing a money judgment can be tangible or intangible.  Intangible assets can include a wide variety of intellectual property which should not be overlooked as executable assets.  There are times when a judgment creditor will succeed in enforcing a judgment only because of the existence of intellectual property which can be seized or attached.

When pursuing a thorough investigation of the assets of a judgment debtor it is wise to dig into the possible existence of any intellectual properties.  Some of the assets which can properly be labeled as intellectual property would include

  • copyrightable works
  • patented inventions
  • trademarks
  • trade secrets
  • literary works
  • artistic works
  • ideas
  • goodwill
  • and the like.

The value of these types of assets can be tapped for payment of a judgment.

Each state or jurisdiction will have its own post judgment remedies available for enforcement.  Using whatever means are lawful and appropriate a debtor may be able to acquire the rights to intellectual property.

This is an area of particular complication in judgment law.  A judgment debtor would do well to seek a highly qualified and experienced judgment lawyer for the purpose of wading through this area of law.  Though I have successfully acquired the rights to intellectual property from my own debtor, I recommend consultation with a top notch attorney who thoroughly understands the ins and outs of acquiring these rights through the lawful execution of post judgment remedies.  This is not an area of judgment collecting that is simple for a novice to grasp.

Having said all this, I still am excited when I can uncover the existence of intellectual property rights owned by my judgment debtors.  These are assets that have real monetary value.  They can sometimes be of extraordinary value in the minds of my debtors.  I have found that my judgment obligor sometimes can be moved to pay off a judgment quickly rather than risk the loss of intellectual property rights.  It is amazing how the mere perceived threat of loss of intellectual property rights can get a debtor to find a way to pay a judgment debt that had previously been ignored.

I can’t ever overstate the value of performing a thorough asset investigation of judgment debtors.  It is the area where most judgment creditors fall short.  The bigger the judgment debt, the more vital it is to do a complete post judgment asset investigation.  No asset investigation is complete if it fails to discover the existence of intellectual property and their corresponding rights.  They can be better than gold.

It is absolutely a fact that intellectual property can be an executable asset.  Go find them, and then go after them.  You’ll get your judgment money.

Bryan

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Motion to Compel Post Judgment Discovery

Once a party wins a money judgment, the natural followup is to begin the process which will lead to getting paid all of the judgment money.  The activities that are authorized for gathering information about the judgment debtor and his assets is commonly known as post judgment discovery.  Depending on the court jurisdiction involved, post judgment discovery may include written interrogatories, depositions, request for documents or things to be produced,  or permission to enter upon land or other property for inspection or other purposes.  Many times a judgment debtor will purposely fail to cooperate by ignoring the judgment creditor’s requests for post judgment discovery.  They choose to not answer questions truthfully and thoroughly, or they will neglect to produce the requested documents or items.  This is when it is the creditor’s right to file with the court a Motion to Compel Post Judgment Discovery.

Post Judgment Discovery can be a critical component of a judgment investigation.  It can uncover key information about the judgment debtor’s assets.  This information can be used to seize, freeze, lien, and levy those discovered assets so that the judgment creditor can get paid.

When the judgment creditor needs to have access to the debtor’s answers or documents in order to prepare for execution of his judgment, the debtor is obligated to provide them.  Proper requests for post judgment discovery must also be complied with in a timely fashion.  The refusal to cooperate on the part of the defendant can be dealt with successfully by utilizing the Motion to Compel Post Judgment Discovery.

The Motion to Compel will include an explanation of why the discovery is necessary.  It will also explain how the judgment debtor failed to adequately comply the request for discovery.  The motion will also ask the court to compel the debtor by written court order to present the answers, things, or documents specified in the request for post judgment discovery.

When the judge signs the order granting the Motion to Compel the judgment debtor will possibly respond to the discovery request to the satisfaction of the judgment creditor.  This may then lead to collecting the debt and ultimately the full satisfaction of the judgment.  But…not always.

We will talk about what we do in those instances where a judgment debtor still refuses to cooperate in post judgment discovery even after a Motion to Compel has be granted.  This will be our next post.

Let’s not play around.  Let’s go get what they owe us!

Bryan

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Locate a Judgment Debtor Who Moved

I have owned money judgments against a number of debtors that were hard to locate.  I have had addresses where they formerly lived, but did not know where their current residence addresses.  There are many ways to track down or skip trace a judgment debtor.  What I want to do is focus this post on one particularly successful method I have used to locate a judgment debtor who moved.

It is really almost too simple.  It is so easy that it might not be understood as a truly great means of tracking down a hard to find dead beat debtor.  When I am in the middle of a post judgment investigation I look for easy ways to discover the information I need.

What is this method?  Simply go to the last known address of the lost judgment debtor and contact the neighbors.  It is rare that I cannot uncover a current or more recent address on a person when I have approached his former neighbors asking for help.

Usually some people in the old neighborhood have a pretty good idea of where the person moved when they vacated the old residence.  Most of the time it is an easy task to get one or more of the old neighbors to divulge what they know about where their old neighbor moved.

If I do a good enough job of introducing myself in a way that seems honest harmless and disarming, I can frequently get information to help me locate a judgment debtor who moved.  People have to trust that it is okay to tell me.  I can’t give the impression that there is anything illegal, sneaky, or immoral about me or my request for help.

A sincere smile and a friendly handshake as well as a demeanor that encourages trust, will usually help lower the skepticism that naturally exists.

I want to come across as someone who needs their help and would greatly appreciate any assistance they can provide.  I want to make it as easy as possible for them to feel good about helping me in my quest to locate a judgment debtor who moved.

If I do not gain the information I need from one neighbor, I just continue contacting others until I succeed.  Sometimes I have obtained the whereabouts of my debtor from the first neighbor that I meet.  Sometimes it takes meeting and inquiring of several former neighbors.  I don’t give up until I succeed.

I don’t want to forget about the person who currently lives in the very house or apartment where my subject used to live.  This person may be the best source in the old neighborhood.

There is nothing wrong with me approaching a former neighbor in my quest to locate a judgment debtor.  I have to be confident that I am engaging in an activity that is moral, legal and ethical.  If I believe it, then it will be easier for those that I question to believe it as well.

If questioning your judgment debtors old neighbors is an idea you hadn’t thought of, think about how simple it might be.  Good luck collecting the judgment money you are owed!

Bryan

Here is a link to another post about locating a judgment debtor.

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Don’t Encourage the Judgment Debtor to Appeal

Here is an explanation of what I mean when I say “don’t encourage the judgment debtor to appeal.”

As soon as I have won my lawsuit and have been awarded a money judgment, it is only natural that I will be anxious to get on with collecting my money as soon as possible.  After all it has been quite some time since my legal adversary engaged in the wrongful activity that led to me filing my claim against him in court.  I have had to wait as patiently as I could for the entire legal process to play out in my lawsuit.  In some cases it may be months or years since the original cause of action.  I am ready to get my money and experience justice.  The court judgment has proven my case.  I won a money judgment and I want my money now.

This is all well and good but there is needs to be some consideration on my part about the possibility that my judgment debtor could choose to appeal the court’s judgment that I won against him.

In essentially every court and jurisdiction there is a statute of limitations for filing an appeal to a lawsuit.  Normally the time limit to appeal expires in a reasonably short amount of time.  For example, in some cases the window of opportunity to file an appeal may be only a few weeks or so.

With this fact in mind, I need to be cautious about what judgment collection activities I engage in prior to the expiration of the statute of limitation for appeals.  If I appear to be extremely aggressive in my approach towards enforcing my judgment, I may inadvertently be pushing my legal adversary towards filing an appeal.  I certainly do not want to do that.

The last thing I want after having already fought and won a favorable money judgment, is to have to go back to court for further litigation against my legal enemy.  After all, it would not only be costly in terms of time, money, and energy, there is also the real possibility that I could lose my case in appeals court.

Rather than risk facing an appeal, I would rather lay low for the relatively short space of time necessary until the statute of limitations for appeals has run its course.  I will be very conscientious about making sure that my judgement debtor does not feel unnecessarily threatened by anything that I do during this time period.

During the time when an appeal can be filed, I prefer for my judgment debtor to forget that I exist, and I want him to think that I have no intention of ever aggressively enforcing the money judgment that I was awarded.  I don’t want him to have any idea that I am even thinking about collecting my judgment.

While I am laying low I am not inactive by any means.  I am still quite active, but in a quiet and behind the scenes sort of way.  I am busy pursuing a comprehensive post judgment investigation of my judgment debtor and my judgment debtor’s assets.  I am learning everything that can be learned about him and his assets so that I can be fully prepared to collect my judgment money as soon as the time for appeals has elapsed.

As soon as an appeal is no longer a threat, I will be ready to implement my plan to seize, freeze, levy, and garnish according to my plan of enforcement.

If bankruptcy is commonly considered the worst enemy of a judgment creditor, the filing of an appeal by my judgment debtor might be the second worst enemy.  I would serve my own cause best by doing everything wisely to avoid pushing my debtor into an appeal.  Most judgment debtors will not go to the time or expense to file an appeal unless they feel that their judgment creditor is seriously able and willing to make them pay.

It behooves me to exercise patience for the first few weeks after winning my lawsuit.  There is truth in the statement that “patience is a virtue.”

Good luck as you collect your judgment money!

Bryan

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