Private_Investigation Discovery CdPrivateInvestigation
Non-Judicial Investigations Of Debtor
Very often, the most valuable information gathered about a debtor's assets comes outside of the judgment enforcement process, through private investigations. In fact, there is an old saw that goes around among creditors' rights attorneys that you learn about the debtor's assets outside the courthouse, and the primary purpose of post-judgment discovery is to establish that the debtor is lying about assets. This isn't exactly true -- goodness knows that in complex cases the only way for a creditor to get the complete information it needs is through judicial discovery -- but there is not just a little truth in this old saw. A smart creditor will gather as much information as possible outside the court process, before starting post-judgment discovery. The following is by no means an inclusive list of the things that creditors will do to search for assets outside of the court discovery process.
When I get a case for enforcement, the very first thing that I will do is to run a Google search of the debtor. Usually, debtors who have money are engaged in things, whether for business or just socially, and reports of these will show up on the internet. There might also be references to places the debtor has lived (and may continue to own properties), business associates of the debtor who themselves might be researched to see if they are in partnership with the debtor, and many other things.
I will also set up a Google alert for my debtor, which will send me an e-mail anytime the debtor's name pops up new. This can be useful to learn that the debtor has been the subject of a new job announcement, that somebody has died and the debtor was listed as a surviving heir, or that the debtor was mentioned at some social gathering. For example, I once found out through this method that the debtor had attended a meeting of a yacht club, which lead to the discovery of the debtor's yacht held in the name of a shell company.
The Case File
There are often nuggets of useful information found in the file of the case leading to the judgment, such as depositions where the debtor was asked about employment information, business subsidiaries and affiliates, etc. Often, debtors will file reams of documents to try to stave off summary judgment, and these may yield useful leads to a debtor's assets.
Creditors have access to a variety of commercial database services, not the least of which being LexisNexis and Microbilt, that can -- literally in seconds and just for a few bucks -- generate hundreds of pages of reports on the debtor, including existing and old bank account information, credit applications, credit card information, property records, utility providers, and various public records. This information will start to fill in the picture of the debtor and give the creditor an idea of the liquid assets to execute upon first.
These are the legal database services; there are also commercial database services outside the U.S. which, well, suffice it to say may be able to provide information that isn't available from the U.S. providers. Many of these offshore database services get their information from hackers of banks and other financial institutions, and can frequently reveal undisclosed funds in offshore banks and records of financial transactions between borders.
If a case has any significant value, the creditor will usually hire a private investigator to track down the debtor and its assets. While there is a great variety in the quality of private investigators (some will merely print off data they can find on the internet or through the databases and charge you for what you can easily do yourself), the good private investigators will get out into the field, do "trash pulls" by stealing the debtor's garbage to look for letters and receipts, hide a real-time GPS tracker on the debtor's car, use drones to survey the debtor's property, and -- most importantly -- interview folks who might know the whereabout of the debtor's assets and also don't like the debtor (think ex-spouses, ex-employees, and ex-business partners here). Good private investigators also use database services quite heavily, of course, but they will also follow up on the leads generated by what those databases reveal, such as rooting through the property records for signs of a fraudulent transfer, contacting businesses that have recently pulled a credit report on the debtor to see what happened, and numerous other things.
The truth is that a creditors' rights attorney will often hire a private investigator specifically because they will push the envelope and do things for which the attorney might get called on the carpet by the state bar; private investigators introduce "plausible deniability" into the collection process for the creditors' rights attorney, who can use the information while disclaiming specific knowledge of where it came from. Very often, private investigators will do their work sight-unseen, and the debtor never gets wind of it. Because a debtor has no right to discovery against the creditor in post-judgment enforcement proceedings, there is little that debtor can do to ferret out overly-aggressive conduct by a private investigator unless it is otherwise brought to the debtor's attention.
All of which is why private investigators are frequently used, and the best ones are worth their weight in gold.