Debtors are nothing if not clever when it comes to hiding assets. As any creditor or debt collector can tell you, discovering hidden assets and collecting outstanding accounts is not easy. If you suspect that a debtor has taken measures to avoid repayment by using fraudulent transfers, hiding assets in an LLC or other means, you will need more than just tenacity on your side. You may need to hire a forensic accountant to aid you in the collections process.
What is the role of forensic accountants?
Forensic accountants investigate bank records, financial transactions and other forms of data to investigate where certain assets have gone. The evidence they gather can prove crucial to establishing that a debtor has deliberately dissipated or hidden assets, whether lawfully or fraudulently. They often testify as expert witnesses at court hearings and trials.
In some situations, forensic accountants can also advise creditors on how to collect on their debts. Once they have established that someone has tried to hide assets, they can provide a road map of the steps to take to recover them and enforce collections.
How they help with collections
While many forensic accountants work independently, most are employed at corporate accounting firms. These firms sometimes work in tandem with law enforcement agencies and private clients to investigate financial wrongdoing. When it comes to collections, collectors and their attorneys can find invaluable allies in a trustworthy and experienced financial accountant or firm.
In particularly difficult collections cases, your repeated efforts at collecting will not be enough to yield results. The proof gathered by a forensic accountant can be what you need to advance a case against a recalcitrant debtor. Along with a collections attorney, a forensic accountant may be a key team member in tracing money, performing due diligence and recovering your outstanding accounts.