Debtor spent all his cash quickly

[Taxing Matters]

Also is it legal to withdraw $100,000 cash from his bank accounts in around a month time, or to keep or carry that cash with him in his home or during travel?

That's legal, as is spending all of his money on consumable items like food, liquor, vacations, or whatever. No law restricts what he can spend his money on while owing debts to others. The creditor therefore has to find and attach the debtor's nonexempt assets before the debtor can spend them. If the creditor misses that chance and the debtor spends the money, there is nothing the creditor can do about that; the creditor is just out of luck in that circumstance.

 

[softguy]

Thanks for continued advice. On some occasions, he withdrew over $10,000 on same day. In that situation, I saw somewhere that the bank must report the withdrawal to the IRS, which might come around to inquire about why that person need all that cash. Will this help me in any fashion?

The debtor has no receipts or proof of any kind for any purchases he claimed spending his cash. Will this also help me in any fashion?

 

[quincy]

Thanks for continued advice. On some occasions, he withdrew over $10,000 on same day. In that situation, I saw somewhere that the bank must report the withdrawal to the IRS, which might come around to inquire about why that person need all that cash. Will this help me in any fashion?

The debtor has no receipts or proof of any kind for any purchases he claimed spending his cash. Will this also help me in any fashion?

No. It will not help you. He had money. He spent money. Nothing was in place to prevent him from doing so.

 

[Taxing Matters]

Thanks for continued advice. On some occasions, he withdrew over $10,000 on same day. In that situation, I saw somewhere that the bank must report the withdrawal to the IRS, which might come around to inquire about why that person need all that cash. Will this help me in any fashion?

No. First of all, the bank is only required to report cash deposits that exceed $10,000, not withdrawals. Second, given the restrictions on disclosure of that information you'd likely not be able to obtain it.

The debtor has no receipts or proof of any kind for any purchases he claimed spending his cash. Will this also help me in any fashion?

He's not required to have receipts for it. It's up to you to prove any fraudulent transfer, not up to him to prove what the money was used for.

 

[quincy]

softguy, you might want to consider turning your judgment over to a debt collection agency. The agency will either take a percentage of the amount collected on your behalf or they will purchase the judgment from you and you will at least walk away with some money.

 

[softguy]

Thanks for continued advice. I just reread the hearing transcript of the judgment. Debtor's brother, who lives in the same home with the debtor, testified that he (debtor's brother), few weeks prior to judgment, bought a car on his (debtor's brother) name by paying $13,750 cash. Debtor's brother said that the money is a gift he got from his father prior to the father's death 10 years ago and he (debtor's brother) saved it as cash and used for car's purchase. He also testified that he owns nothing else, and has no job or income since his father's death, and living with his brother (debtor) since the father's death. The cash purchase of defendant's brother was made few weeks after the defendant withdrew the cash from banks. Will this additional information, in any way, help to prove that the defendant lied during his testimony (after the judgment) by saying that he spent the cash on consumable items.

 

[Zigner]

Thanks for continued advice. I just reread the hearing transcript of the judgment. Debtor's brother, who lives in the same home with the debtor, testified that he (debtor's brother), few weeks prior to judgment, bought a car on his (debtor's brother) name by paying $13,750 cash. Debtor's brother said that the money is a gift he got from his father prior to the father's death 10 years ago and he (debtor's brother) saved it as cash and used for car's purchase. He also testified that he owns nothing else, and has no job or income since his father's death, and living with his brother (debtor) since the father's death. The cash purchase of defendant's brother was made few weeks after the defendant withdrew the cash from banks. Will this additional information, in any way, help to prove that the defendant lied during his testimony (after the judgment) by saying that he spent the cash on consumable items.

It might, or it might not. There is no way we can guess.

 

[Taxing Matters]

Will this additional information, in any way, help to prove that the defendant lied during his testimony (after the judgment) by saying that he spent the cash on consumable items.

It would be a fraudulent transfer if you can prove that the brother got the cash from the debtor. The problem is that cash is fungible; one dollar is the same as another. So you need something to make the link that the cash the brother used did indeed come from the debtor. The debtor's withdrawal of cash several weeks before the brother buys the car probably won't get you there by itself. If you had a withdrawal in the exact same amount as the brother used for the car that would be pretty good as it would be pretty unusual to say the least for the debtor to just happen to withdraw that exact amount and not have given it to his brother. But apart from some link like that, you are simply left with what may be coincidence; the debtor withdrawing cash a few weeks before and the brother buying the car later. Who is to say the brother didn't use his own cash stuffed away to buy it?

 

[softguy]

Thanks for continued advice.

Debtor withdrew $100,000 cash almost 3 months prior to judgment, and his brother purchased car with $13,750 cash few weeks after that withdraw. There is no match between these amounts but the timing is my only strong point.

A neighbor of these brothers, who happened to be my friend, told me that the debtor's brother has no job for many years, simply play with dogs and cats. After the judgment, the debtor joined his brother in spending time.

Please advice if it is worth enough to hire an attorney or debt collection agency? I wish to remind you that the debtor already submitted his financial records, and the debtor is living on his social security only, after the judgment, and has no more assets, except small home which is his homestead (exempt in Florida).

 

[quincy]

... Please advice if it is worth enough to hire an attorney or debt collection agency? I wish to remind you that the debtor already submitted his financial records, and the debtor is living on his social security only, after the judgment, and has no more assets, except small home which is his homestead (exempt in Florida).

You will need to make the decision on whether it is worth it to hire an attorney or a debt collection agency. We cannot make that decision for you.

A judgment lasts a long time, though, so even if you cannot collect what is owed to you now, you could have success collecting a year or two from now.

You do not necessarily have to pay a collection agency, by the way. An agency might purchase the judgment from you. But in selling the judgment, you are likely to be paid by the agency only a small fraction of what you are owed.

 

[softguy]

Thanks for continued advice! I will wait for few years which seems a better choice.

 

[quincy]

Thanks for continued advice! I will wait for few years which seems a better choice.

That could be a good choice for you. The fellow is obviously trying hard right now to prevent collection efforts. It could be easier to collect later.

Good luck.

 

[NeilTheCop]

Please advice if it is worth enough to hire an attorney or debt collection agency? I wish to remind you that the debtor already submitted his financial records, and the debtor is living on his social security only, after the judgment, and has no more assets, except small home which is his homestead (exempt in Florida).

It would certainly be worth paying for a consultation with an attorney who specializes in such matters.