What to Do After Winning a Lawsuit
So you have a judgment against a party, maybe it’s a company or an individual. You won your lawsuit, congratulations! Now you have a judgment. So the question is, what do you do next to collect the money? The first question people ask is: should I do an asset search? We’re going to talk about the pros and cons and the reasons you want to consider whether or not you should run an asset search after you get a judgment in order to collect your recovery. Many times clients are wary about running an asset search because you don’t want to throw good money after bad, you don’t want to spend the money, you’re also worried about whether it will be done properly to get accurate information but also done properly where it’s not illegal and you’re not going to get into trouble. So we’ll talk about all these things here on our channel. Remember, we are licensed private investigators as an agency, and we specialize in asset searching and fraud investigations. This is an area that we do quite a bit of work in.
What Is an Asset Search?
An asset search is a process of looking for records which will show what is owned by the subject debtor or the defendant. It could be assets such as real estate, vehicles, corporate assets, and here’s the big one: I bet you’re thinking of bank accounts. Can you search for bank accounts? Well, here are the pros and cons of running an asset search, especially after you get a judgment. If you run an asset search, you will get a snapshot of what assets are held by that debtor at the time of the judgment. So if a year or two or three years later, you find that the debtor has squandered assets or transferred assets or improperly disposed of assets, putting them in somebody else’s name for example, you now have a snapshot showing what they had at the time of the judgment or shortly after. So you can prove, “Look, they had this million-dollar house, now they don’t. Let’s find out where that asset went.” They had this much money in the bank, now it’s all gone. Let’s find out if it was transferred fraudulently. Right? So that’s the pro number one. You want to get a snapshot of where they’re at to lock that in place because two or three years from now, you can’t go back in time and run an asset search historically. You can a little bit, but the records aren’t going to be as accurate as they are in the moment.
Cost of Running an Asset Search
So what is a disadvantage of running an asset search? Well, the first one is the cost. You have won your judgment, probably because somebody took money from you. Maybe it was a fraud scheme, a scam, maybe it was a contract that went bad, which means you have a loss. That’s what your judgment is for: to pay back money you lost. Now, to run an asset search, you have to put more money in. So maybe you don’t want to lose more money. If you don’t want to put more money out of your pocket, maybe you don’t have any money, right? All the money was stolen or taken by this defendant. So the downside is now you have to put money into the process to get an asset search done. We’ll talk about a couple of ways to maybe offset part of that. One is you could do the asset search yourself.
Doing the Asset Search Yourself
An asset search is simply a research project. The hard cost of money out of pocket is not that much. The biggest cost is the labor, the time. Most asset searches take 20 to 24 hours of work to do the research, compile the records. There may be a few hundred in actual cost to get records, to buy copies of deeds, or to get corporate records, and those costs are government fees to get official records. So the actual money out of pocket is not that big a deal. It’s just the time. So if you’re willing to put in the time, you can actually do the asset search yourself. You won’t have the huge out-of-pocket expense; you’re just putting time into it. And our website, Active Intel, will show you how to do it. You’re also able now to book a consultation with a licensed investigator that can explain to you a little bit more one-on-one how the asset search process works.
Advantages of an Asset Search
What’s another advantage? Let’s go back to the pro column of doing an asset search. Number one: You will know if in that moment it’s worth chasing the debtor. So if they don’t have any assets right now, maybe their bank accounts are empty, they have no real estate, you know now is the time to step back a little bit, put that judgment on hold, file it away, and maybe come back in a few years and see if they have assets now. It will tell you where you stand with that judgment and if it’s even worth trying to do garnishment or collection. So that’s an advantage. It’ll paint the picture. You won’t be operating in the dark about doing the recovery collection effort.
Disadvantages of an Asset Search: Legal Considerations
Let’s go back to the con list. Disadvantages: You have to be very careful when you’re doing an asset search not to run afoul of the law. There are many federal laws which prohibit certain types of activities in finding assets. The most important law is the Gramm-Leach-Bliley (GLB) Act. So if you’re doing an asset search or you’re paying somebody to do an asset search, make sure it’s done using GLB-compliant methods. Gramm-Leach-Bliley Act-compliant methods because many of the methods that you could use to get information are illegal. Sometimes even investigators don’t know what’s legal or not legal. If you’re not doing asset searches every day, you may not be aware of the most current laws.
Illegal Techniques in Asset Search
For example, if you pick up a phone and you call up a bank and say, “Hey, Chase Bank, this is John Smith. My social security number is this. Tell me how much I have in the bank,” this is you calling to pretend you are John Smith. If you do that, you’re breaking the law. You’re actually committing identity theft by pretending you’re somebody else. That’s obvious, but here’s another trick that used to be more common and some investigators still do this not knowing it’s illegal.
Misrepresentation to Obtain Bank Information
Let’s say you want to find out somebody’s bank account. What you do is you make up a fake rebate check that looks official. It’s got a logo on it, a company name, and you mail it to the debtor. You say, “Hey, thank you for purchasing your product from us. Thanks for buying American. We appreciate your business. Here’s an app showing of our appreciation. Here’s a check for $5, here’s a check for $10,” and you mail it to that debtor. When they cash or deposit the check, it will stamp on the back of that check what bank it was cashed at. So now you know where they have an account. It might seem like you didn’t do anything wrong, but you did because the Gramm-Leach-Bliley Act says that you cannot make any misrepresentation in order to get private information.
Seizing an Asset Once Found
If you do find an asset, let’s say you find a bank account and it has $800,000 in it, you can immediately go to a writ of garnishment. You can start garnishing the asset immediately. It’s a process by filing some documents to get permission to take that money, and you can walk right into the bank with that garnishment, slap it on the counter, and they have to write you a check from that person’s account without telling them.
Accuracy of Asset Search Reports
The last one on the disadvantage con side is the accuracy of the reports. Look, the term “asset search” doesn’t have any official definition. It means whatever somebody says it is. There are some companies or some people that advertise on Craigslist or on social media that says, “I’ll do an asset search for $50.” All they’re doing is running a Google search on the person’s name to see what pops up on Google. That’s not an asset search. Or maybe they’re running a database Lexus-Nexus type search that shows a few things. That’s not an asset search. A true asset search is when an investigator actually pulls official records.
Importance of Licensed Investigators for Asset Searches
Beware, not all asset searches are equal. If you’re buying one, make sure that the source is not only qualified to do it but also licensed. In almost every state, in order to run an asset search for a third party, you have to be a licensed private investigative agency. If that person or company does not have the proper license, even if the report is right, it can be excluded in court or even result in sanctions against you for violating privacy.
Choosing the Right Source for Asset Searches
Make sure you’re getting a good source for doing it. Shop around, make sure you get the right price, and you’re not paying too much money for doing your asset search. Hopefully, that gives you an example of what’s possible with asset searches. The important thing is making the right decision whether or not you should run an asset search. Sometimes it’s a judgment call: Do you want to spend the money? Do you care about it? Do you want to try to collect your judgment right now or maybe wait a while? But certainly, you have that option.
