When a debtor is hiding assets overseas

When a debtor is hiding assets overseas

| Mar 4, 2020 | Uncategorized

No matter your efforts to make your client pay you, they may fail to do so. On some occasions, they may no longer be able to pay their debt to you. But on others, they might try evading repayment by hiding assets overseas.

Your debtor might think their actions wily and cunning. Yet they cannot avoid paying you altogether, no matter their present circumstances. If you find yourself pursuing a large sum from a delinquent client, keeping these tips in mind can help you attain it.

Know that some jurisdictions will not cooperate

The institution holding your debtor’s assets may try and stonewall you. Some debtors will hide their money in jurisdictions with lax collection laws. Certain countries, like the Cook Islands and Nevis, refuse to disclose information about their banking clients. They also do not recognize collections claims filed through courts in other jurisdictions. If you expect noncooperation ahead of time, you can spend more of your energy devising other means of collection.

Influence the debtor’s associates

Pressuring your debtor’s associates for information could sound like intimidation. But doing so in a cooperative manner may help you piece together your case and find a way of obtaining the funds due to you. Talking with a debtor’s spouse, adult children, friends or business associates can give you a complete picture of their accounts. And if you ingratiate them, you may influence them to persuade your debtor to pay you.

But do not give up, there is still hope

If you can gather enough information to confirm the judgment debtor has assets located overseas in a different country, you can obtain a court order requiring the judgment debtor to return those assets to the United States to pay the judgment. So long as the debtor can be located in California (or in some circumstances, other states), and you can personally serve the debtor, the court can obtain personal jurisdiction over the judgment debtor. Then the court can make the necessary order and failure to comply is contempt of court, a penalty that comes with potential criminal consequences, including jail time. There are cases of judgment debtors spending months, and longer, in jail for failure to comply with court orders and returning overseas assets to California.

Pursue legal recourse

In the United States, suing a debtor who resides in another country can prove fruitless. But filing a lawsuit against a resident debtor whose funds are in another country could prove fruitful. You may still have difficulty collecting the debt. Though, the debtor will face credit consequences if you file a judgment against them. A judgment will remain on their credit report for seven years. Yet they may not want it there in the first place. And that likelihood could finally convince your debtor to pay you off.

Pursuing a debtor whose assets are overseas is a complex and frustrating endeavor. But with diligence and persistence, you may receive the repayment you’re seeking. Consulting a lawyer with debt collection experience can help you understand the challenges of the process.