The Expert Podcast

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, and 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, we specialize in asset searching and fraud investigations. This is an area that we do quite a bit of work in.

An asset search is a process of looking for records that 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. 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.

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, or maybe it was a contract that went bad, which means you have a loss. That's what your judgment is for, is 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 now; 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. 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 and 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, not have the huge out-of-pocket expense. You're just putting time into it. Our website, Active Intel, will show you how to do it. You're also able 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.

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's 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.

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 Graham-Leach-Bliley Act (GLB). 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, 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. If you're not doing asset searches every day, you may not be aware of the most current laws. 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—you're 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.

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 and say, "Hey, thank you for purchasing your product from us. Thanks for buying American. We appreciate your business. Here's a check for $5, here's a check for $10." And you mail it to that debtor. When they receive it, they're going to say, "Hey, I got $10 for free!" Then what do they do? They go cash it at their bank or they deposit it at their bank. Either way, it's going to stamp on the back of that check what bank it was cashed at. Now you get that check back, and you say, "Oh, now I know they have an account at, you know, TD Bank." It might seem like, well, you didn't do anything wrong, you didn't commit identity theft, but you did. The GLB Act says that you cannot make any misrepresentation in order to get private information. Well, banking information is considered private, so that was a misrepresentation. It's a violation, and we've had many cases where we have seen for our clients, where if they're involved in a lawsuit, we tell them to keep their eyes open for any unusual activity—mail, phone calls, text messages—anything. Let us know. And we've seen some of these techniques, and we've pointed them out. The other side has been admonished, sometimes prosecuted or regulated for doing these things. So, you have to make sure you're doing it properly, whether you do it or somebody else does it, that it's GLB-compliant.

Let's go back to the pro side, the advantage side. If you do find an asset, let's say you find a bank account and it's got, you know, $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. 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. Now, remember, in all this, we're not attorneys, we're not giving you legal advice. This is just some observations of what we see attorneys do and what we see in cases. So you want to make sure you get good legal advice as you're working on these things. So that's an advantage. You find an asset, boom, you can go seize that asset immediately.

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 say, "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, like LexisNexis-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. You go to the recorder of deeds, you go to the DMV to get car titles, you go to DENT records for banking information, you go to Secretary of State for corporate records, you go to USPTO for intellectual property. There are places that are official, and I say that really important: official records for every type of asset, not just a Google search or some random third-party database. So 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. Because technically, in almost every state, in order to run an asset search for a third party, you have to be a licensed private investigative agency. And if that person or company does not have the proper license, if you get that report, you get that information, even if it's right, and you use it in court, you use it to garnish assets, if the other side finds out that you did not use a licensed investigator and they did it kind of like gray area, black market kind of thing, they can have it excluded and maybe even have sanctions against you for violating their privacy. And of course, somebody who's not licensed is probably more likely to use improper techniques. So, that's another con: making sure that you check out the source of your asset search to make sure they're licensed, make sure that even if they are licensed, they are experienced in doing these things, not finding out how to do it on the fly.

Now, we're a member of a lot of private investigator local trade associations, and there's a couple of them that have an email chat board where you can email back and forth, "Hey, I got a question about this or that," between investigators. It's a private board. And we see investigators who are licensed that ask the most basic questions: "How do I run an asset search?" "How do I get this information about employment?" "Where do I find this record?" These are things that are common knowledge, and what it tells me is that that person has a client, a customer that wants to buy something, which they don't know how to do, and they're actually going to do the search improperly. So, be really careful.

We will include a link to the video about how to hire a private investigator to do asset searches.