On collecting money from debtor

[denverm]

What is the name of your state? Florida
I won a case in 2016 but, for some reasons, I did not try to collect the judgment. Now, the records of the debtor show the following,

(i). Debtor has a husband (husband has $400/month income as rent from a house he has on his name. Further he has a piece of land on his name but that did not produce any income), between the years 2016-2021. They got divorced towards the end of 2021. During those years, she was transferring her salary, from her bank account, as soon as it is deposited by her employer, into her other relatives’ accounts.

(ii). Debtor has been making almost $6000 (disposable earnings) per month from her job since 2016 until now.

(iii). Since end of 2021 (after their divorce), debtor is living alone but withdrawing her salary as cash from bank, as soon as it is deposited, She said she is spending that cash for living expenses. She will retire sometime in 2023 (that is what she said)

I could not afford an attorney and did my own research on this matter. This forum and some previous postings in this forum greatly helped me educate on this! I found the following and I greatly appreciate if you could share your thoughts on my questions below.

There is Florida statute 222.11 Exemption of wages from garnishment, and the relevant parts are

1(c) “Head of family” includes any natural person who is providing more than one-half of the support for a child or other dependent.

2(a) Disposable earnings of a head of a family, which are greater than $750 a week, may not be attached or garnished unless such person has agreed otherwise in writing.

(3) Earnings that are exempt under subsection (2) and are credited or deposited in any financial institution are exempt from attachment or garnishment for 6 months after the earnings are received by the financial institution if the funds can be traced and properly identified as earnings.


She is no longer supporting anyone since the end of 2021 therefore I can garnish her salary as per Florida statute 222.11 and will do it soon. I am not concerned about this. My questions are,

(A). whether she is involved in any fraudulent transfer CHAPTER 726 http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html during the years 2016-2021 when she has husband?

(B). Whether she will be qualified as head of family for the years 2016-2021 when she had husband? The financial record shows that she was paying almost all bills such as utilities, insurance to their home, groceries, husband’s etc. during all those years.

 

[adjusterjack]

Did your read stephan66's thread?

Is this fraudulent transfer? | Forum.FreeAdvice.com

Whether she will be qualified as head of family for the years 2016-2021 when she had husband?

Her prior head of the family status is irrelevant. The exemption ONLY applies WHEN you file for wage garnishment and the debtor claims the exemption. You never attempted to file. Now that she is single, her wages are fare game unless she is supporting dependents.

whether she is involved in any fraudulent transfer. The financial record shows that she was paying almost all bills such as utilities, insurance to their home, groceries, husband’s etc. during all those years.

No, there was no fraudulent transfer since she used her earnings to pay living expenses.

If you file for wage garnishment now the employer will take out the appropriate amount for you BEFORE she gets her pay deposited so it doesn't matter what she does after that.

If she does retire in 2023 her social security will be exempt as well as qualified retirement accounts.

Google Florida exemptions from judgment.

How much money does she owe you and how did it come about?

 

[denverm]

She owes me $67,000.

It seems I did not ask my question properly (or you overlooked some part of my question),

You mentioned

No, there was no fraudulent transfer since she used her earnings to pay living expenses.
She did not pay for living expenses but transferred part of the money to her relatives during 2016-2021, as I mentioned earlier (same is repeated again below)

Debtor has a husband (husband has $400/month income as rent from a house he has on his name. Further he has a piece of land on his name but that did not produce any income), between the years 2016-2021. They got divorced towards the end of 2021. During those years, she was transferring her salary, from her bank account, as soon as it is deposited by her employer, into her other relatives’ accounts.

She never claimed that she used that money for living expenses.
whether the above money she transferred to her relatives, between 2016-2021, is fraudulent transfer? will this decision depend on whether currently (since year 2022 until now) she is no longer head of family?

 

[Zigner]

How did you obtain the information about her financial matters since 2016?

 

[denverm]

How did you obtain the information about her financial matters since 2016?

She submitted all her back records.

 

[adjusterjack]

OK, I get what you are asking.

Was the money she transferred to relatives during 2016 to 2021 a fraudulent transfer while she was head of the family.

I don't think so. The money would have been exempt under the head of the family rule. I don't think it mattered what she did with it since you couldn't get to it anyway.

You also had 4 years from the transfers to take legal action under 726.110. If you filed an action today, any transfer made prior to 2/28/19 would be untouchable.

Worse, your action would also be subject to 726.111 Supplementary provisions which give the debtor other defenses including "laches."

"Laches" is a legal doctrine that bars a claimant from receiving relief where the claimant's delay in pursuing the claim has operated to the prejudice of the opposing party.

Whether that becomes an issue now is anybody's guess but making $6000 per month would behoove her to look at anything and everything as a defense to enforcement of your judgment.

If you want to bring an action based on fraudulent conveyance I suggest you consult an attorney.

Otherwise, you may just have to resign yourself to wage garnishment as long as she has wages to garnish.

 

[denverm]

I read 222.11 Exemption of wages http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.11.html several times

part of it is:

1(c) “Head of family” includes any natural person who is providing more than one-half of the support for a child or other dependent.

2(b) Disposable earnings of a head of a family, which are greater than $750 a week, may not be attached or garnished [i.e., it is exempt] unless such person has agreed otherwise in writing.

(3) Earnings that are exempt under subsection (2) and are credited or deposited in any financial institution are exempt from attachment or garnishment for 6 months after the earnings are received by the financial institution if the funds can be traced and properly identified as earnings.

Based on the literal interpretation of the above law,

Now (i.e., in March 2023) if I file a fraudulent transfer claims or proceedings supplementary claims for the transfers she has made during 2016-2021 then: Whether those claims will be addressed based on her “head of family” status during 2016-2021 OR Whether those claims will be addressed based on her “head of family” status currently?

(if the former is true then, it seems, there is no meaning in me filing a fraudulent transfer claims or proceedings supplementary claims for the transfers she has made between 2016-2021, because the court will determine that she is head of family during 2016-2021)


I also read the following (which is in 2003, therefore the amounts are outdated) from:
https://www.floridabar.org/the-florida-bar-journal/so-this-isnt-workwhen-a-wage-isnt-protected/

F.S. §222.11 provides the exemption at issue. Specifically, earnings of a head of family that are less than or equal to $500 a week are absolutely exempt from garnishment.1 Further, disposable earnings greater than $500 [this amount is now $750] per week are exempt unless the individual agrees otherwise in writing.2

These earnings may be invested in other types of exempt assets (including, e.g., homestead, certain annuities, and life insurance) without the transfer being considered fraudulent under the Fraudulent Conveyance Act.3 Exempt earnings deposited into a bank account are exempt for six months after deposit, as long as the funds are traced and properly identified as earnings.4

Thus, if Mr. Jones earns $500 weekly and has creditor issues, theoretically he could use the earnings to support himself and his family, and he could take any excess and pay down his mortgage on his Florida homestead (another exempt asset) without fear that creditors will garnish the extra earnings. Earnings over $500 per week would also be creditor-exempt if Mr. Jones had not otherwise agreed in writing.

Requirements for Exemption

The debtor has the initial burden of proving entitlement to the earnings exemption.5 The debtor must establish that he or she is a head of family and that the amounts in dispute constitute earnings as defined in the statute.

 

[adjusterjack]

Now (i.e., in March 2023) if I file a fraudulent transfer claims or proceedings supplementary claims for the transfers she has made during 2016-2021 then: Whether those claims will be addressed based on her “head of family” status during 2016-2021 OR Whether those claims will be addressed based on her “head of family” status currently?

(if the former is true then, it seems, there is no meaning in me filing a fraudulent transfer claims or proceedings supplementary claims for the transfers she has made between 2016-2021, because the court will determine that she is head of family during 2016-2021)

That's right. I think I said that already. If she shows that she was head of the family back then, her wages would have been exempt back then. Fraudulent transfer wouldn't apply because her wages were untouchable.

But you could have a claim for fraudulent transfer after her divorce if she was still emptying her account and transferring the money to relatives in amounts not needed for living expenses. Anything after 2021 would be within the 4 year limit, assuming a defense based on "laches" doesn't work.

 

[denverm]

Thanks for clarifying her head of family status during 2016-2021.

However, as I said in my posting #1, "Since end of 2021 (after their divorce), debtor is living alone but withdrawing her salary as cash from bank, as soon as it is deposited, She said she is spending that cash for living expenses." She is not transferring to any one once she got divorced. She is saying she is spending it for living expenses but no record, no receipts, no evidence for that. I cannot prove that she is giving that money to someone else. Is she obligated to produce any proof on how she is spending that money once she withdrew from bank?

 

[doucar]

Why don't you just garnish her wages or her bank account?

 

[adjusterjack]

She is saying she is spending it for living expenses but no record, no receipts, no evidence for that.

Under what circumstances did she "say" that? Was it in court, under oath?

If yes, did you not take the opportunity to ask about each expense and its documentation?

For example:

"You say you are spending it for living expenses. Do you have a car payment?
"Yes."
"How much a month?"
"Oh, $350."
"May I see you loan contract?"
"Uh, I don't have it."
"May I see your payment booklet?
"Uh, I don't have one."
"Then I would have you obtain for me a statement from your car finance company."
"Uh, they won't give me one."
"Can you provide any type of documentation of your car loan?"
"Uh, no."

By now her credibility is sinking minute by minute and you move on to the next item - rent or mortgage, utility bills, grocery bills, credit card bills, etc.

If you didn't take that opportunity in court you probably lost any opportunity for another debtor examination.

And there appears to be a contradiction here as you earlier said

She submitted all her back records.

When did that happen? At a debtor's examination? Something else? So she's obviously capable of submitting records of some sort. If she was under oath and denied having records of living expense, that's one thing. But if you didn't ask the specific questions you might not get a second bite at the apple.

If you filed a new action alleging fraudulent conveyance you'd better be able to ask probing questions about every single item of expense and how she will document them.

Understand that testimony IS evidence. If you let that slide without questioning documentation, you lose because the judge will have no choice but to accept her testimony as evidence if you can't refute it or you allow her to get away with "I have no records."

 

[denverm]

doucar

yes, I will do that shortly, but I am also looking into her cash withdrawal from bank and spending it since her divorce.



adjusterjack

yes, in court, under oath during debtor exam. She said she has been using the cash that she withdrew from bank for living expenses and for buying perishable items, liquor, travel, gambling but said that she has no record or receipts (my apologies for not providing this information completely last time). She even said that she is not ordered by court to keep any of those records or receipts.

 

[adjusterjack]

adjusterjack

yes, in court, under oath during debtor exam. She said she has been using the cash that she withdrew from bank for living expenses and for buying perishable items, liquor, travel, gambling but said that she has no record or receipts (my apologies for not providing this information completely last time). She even said that she is not ordered by court to keep any of those records or receipts.

And that's as far as you went?

Well, you're going to have to go a lot further, if you want to get anything out of her.

What you probably don't know is that you can do this in writing with interrogatories and requests for production of documents. Florida rules of procedure allow you to do that more than once if necessary.

I can think of many, many questions that could elicit information that I can use to serve subpoenas on third parties.

It would be a long list and I am not allowed to give legal advice here.

I suggest you study the resources in the following search results:

florida request for production of documents from a judgment debtor at DuckDuckGo

Form-1.977.docx (live.com)

She will have to respond in writing and produce any documents requested. If she's evasive and fails to produce documents that she should reasonably be expected to have you can request an order to show cause why she shouldn't be held in contempt.

At this point that's all I can tell you. If you can't figure out how to do this properly, I suggest you have your lawyer create the documents and serve them on her.

 

[denverm]

You provided very valuable information with links!



I read some of them carefully and I have a couple of questions:



As shown in one of the links you provided, once I (creditor) ask for the following documents as part of post-judgment request for the production of documents from defendant.



(1). Schedule of all monthly living expenses, including: Food, laundry, cleaning, Recreation



(2). All documents evidencing that you or your spouse qualify as head of household as defined by Florida Statutes



For (1), what happens if the debtor did not submit any but submits a note saying that she has no receipts, records, or memory of this?

Can I request an order to show cause why she shouldn't be held in contempt? Whether the court can compel her to keep (or submit) the records/receipts of all these for the past and keep those records/receipts for future purchases? I am asking this specific question because she has been withdrawing cash from bank (starting from the time she divorced her dependent husband) and there is no record of how much and on what she is spending (she already said, during debtor exam, that she is spending the cash withdrew from her salary account for living expenses and for buying perishable items, liquor, travel, gambling but said that she has no record or receipts).



For (2), is it required by her to submit all such documents OR can she say that she needs to educate herself on what specific documents are needed as evidence to prove her head of household status (for some questions, during debtor exam, she said she has no idea what is that, and that she needs to educate herself on that)?



She is very much elusive and knows that I cannot afford an attorney (or barely can get a part-time attorney) therefore I am requesting this forum to help me provide this information. There are many other questions (in the links you provided) as part of post-judgment request for the production of documents from defendant but I have no questions about them.

 

[doucar]

Why spend a lot of time on this pursuit, when it will drag this out and maybe you both tick off the judge and maybe get you some satisfaction, but alot of angst and frustration. Simply garnish her wages and collect that way?