Debtor purchased new TBE property

[gabrial99]

What is the name of your state? FL
Judgment debtor has been withdrawing his salary as currency (cash) and claiming as “spending” on perishables and travel. I also failed to garnish his salary as the court determined he is head of family. He has no other income, and his wife no income.

Months ago, he and his wife bought two properties, worth $9000 and $9500 each by paying currency, and titled them on both their names as tenancy by entirety (TBE) https://www.floridabar.org/public/consumer/tip006/#Spousal Exemption for Jointly Hel . Under oath, both testified that the currency they used for buying them is the rents they have received 6 years ago and earlier, from another (old) TBE property they had at that time (yes, they had another TBE property in the past, but no records on its rents etc) and the salary his wife had at that time (yes, she has job for few years at that time). Banks also have no records about the rents from that old TBE property or his wife’s salary transactions as the time limit of 5 years is over. I suspect that he is using the cash from his current salary to purchase these new TBE properties but have no solid proof to link these. I saw fraudulent transfer activities http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html How to prove that the debtor activities are fraudulent transfer, as I am not finding a solid link linking these two? I spent all my money to win this case but could not get a penny from him. Any help from your side is greatly appreciated.

 

[adjusterjack]

Sorry, I have no magic words for you. Just sympathy. I had rentals long ago and I know what it's like to have uncollectible judgments against deadbeats who are good at making themselves judgment proof.

I stopped throwing good money after bad, gave up and got on with my life, sans rentals.

You might not be there yet but, eventually, you will be faced with the same decision and resign yourself to the fact that you were successfully skunked.

 

[quincy]

What is the name of your state? FL
Judgment debtor has been withdrawing his salary as currency (cash) and claiming as “spending” on perishables and travel. I also failed to garnish his salary as the court determined he is head of family. He has no other income, and his wife no income.

Months ago, he and his wife bought two properties, worth $9000 and $9500 each by paying currency, and titled them on both their names as tenancy by entirety (TBE) https://www.floridabar.org/public/consumer/tip006/#Spousal Exemption for Jointly Hel . Under oath, both testified that the currency they used for buying them is the rents they have received 6 years ago and earlier, from another (old) TBE property they had at that time (yes, they had another TBE property in the past, but no records on its rents etc) and the salary his wife had at that time (yes, she has job for few years at that time). Banks also have no records about the rents from that old TBE property or his wife’s salary transactions as the time limit of 5 years is over. I suspect that he is using the cash from his current salary to purchase these new TBE properties but have no solid proof to link these. I saw fraudulent transfer activities http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html How to prove that the debtor activities are fraudulent transfer, as I am not finding a solid link linking these two? I spent all my money to win this case but could not get a penny from him. Any help from your side is greatly appreciated.

What is the amount of the judgment? If the amount of the judgment is sizable, you could turn it over to a professional debt collection agency.

The collection agency could either collect a percentage of the judgment amount or could purchase the judgment from you outright.

You obviously would not recover all that the judgment-debtor owes you this way, but you avoid the time, energy and hassle of trying to collect it yourself.

 

[gabrial99]

Great many thanks for your responses. He owes me $46,500 plus tax.

I forgot to mention: the debtor and his wife testified that they have another $10,000 currency and it is also TBE (same sources: rents from earlier TBE property and salary from his wife's job).

What are the chances the judge believes the story of the debtor about the source of this $18,500 (9000 plus 9500 used to purchase TBE properties) (and another $10,000 in currency), noting that I have no evidence to disprove debtor’s and his wife's claim.

As side note, my friend told me that if I inform this debtor’s currency matter to governmental agencies like internal revenue service then they may investigate the source of that income, because debtor has to prove the source of that currency.

Is it legal for debtor (or usual pattern for any one) to keep $18,500 plus another $10,000 as currency, for over 6 years, without any proof of linking that currency to the rents received from another property and the job from his wife, and use that currency now for purchase new properties?

If needed, please move or link this question to tax law of this forum.

 

[quincy]

Great many thanks for your responses. He owes me $46,500 plus tax.

I forgot to mention: the debtor and his wife testified that they have another $10,000 currency and it is also TBE (same sources: rents from earlier TBE property and salary from his wife's job).

What are the chances the judge believes the story of the debtor about the source of this $18,500 (9000 plus 9500 used to purchase TBE properties) (and another $10,000 in currency), noting that I have no evidence to disprove debtor’s and his wife's claim.

As side note, my friend told me that if I inform this debtor’s currency matter to governmental agencies like internal revenue service then they may investigate the source of that income, because debtor has to prove the source of that currency.

Is it legal for debtor (or usual pattern for any one) to keep $18,500 plus another $10,000 as currency, for over 6 years, without any proof of linking that currency to the rents received from another property and the job from his wife, and use that currency now for purchase new properties?

If needed, please move or link this question to tax law of this forum.

There is no way for any of us here to say what the chances are of the judge believing either you or the debtor. If you have no evidence that shows what the debtor says is false, however, then it will become a matter of credibility.

 

[adjusterjack]

He owes me $46,500 plus tax.

How did that come about?

What are the chances the judge believes the story of the debtor

Judges aren't there to believe or disbelieve. They are there to make decisions based on evidence. Testimony is evidence. Once it is given, the judge will generally accept it as fact unless it refuted with evidence.

You've already established that his earnings are untouchable because of the head of the family exemption. If he says he saved up a large amount of cash from those earnings, all he has to do is say it, he doesn't have to prove it. The burden shifts to you to prove otherwise with evidence, not just sayso. If you do provide some sort of evidence, then the burden shifts back to him to provide evidence refuting yours.

If both parties give only oral testimony then, as Quincy wrote, it becomes a matter of credibility.

 

[gabrial99]

He damaged my property.

His earnings are untouchable for 6 months due to head of family status http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.11.html : 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.

However, it unclear if he can use that earnings, prior to 6 months of their deposit in bank, to purchase TBE properties. It is a thin line. He know that, and that’s why he is saying that the money he used to purchase the TBE properties is from past TBE property rents and his wife’s salary, dated back prior to 6 years.

As a note, I cannot even testify that the money he used for buying that TBE properties is from his salary, as I have no proof for that: I can only testify that I suspect that he is doing so.

 

[adjusterjack]

He damaged my property.

What property?
How did he damage it?

 

[gabrial99]

I rented him a home, he damaged it. No criminal intention was found but in the civil case, the court determined that he is responsible.

 

[adjusterjack]

What kind of damage?

 

[Taxing Matters]

What are the chances the judge believes the story of the debtor about the source of this $18,500 (9000 plus 9500 used to purchase TBE properties) (and another $10,000 in currency), noting that I have no evidence to disprove debtor’s and his wife's claim.

Probably pretty good. Bear in mind the judge will generally accept testimony as true unless there is some reason to believe the person testifying is not credible or you present more compelling contrary evidence. Since you have no contrary evidence unless you are able to paint them as not credible in cross examination or they are just naturally come across as unbelievable the judge is likely to accept what they say was the nature of the funds. While I've not researched your state specifically, a number of states that recognize TBE property apply a presumption that property held husband and wife is TBE, absent evidence to the contrary. In short, the burden likely falls on you to prove it's not TBE property.

As side note, my friend told me that if I inform this debtor’s currency matter to governmental agencies like internal revenue service then they may investigate the source of that income, because debtor has to prove the source of that currency.

As a former officer for the IRS, let me tell you that a report that someone had $10,000 or $20,000 of cash without more is not all that helpful. The IRS needs to know in what year the income was received as well as the source. While the IRS can make certain presumptions and put the burden on the taxpayer to rebut them, if the taxpayer offers any credible evidence, including his own testimony, about that the taxpayer is likely to prevail on that point. Moreover, it is quite possible the taxpayers did indeed report the income for the year they got the money and can point to that on their returns. In any event, reporting the cash to the IRS doesn't help you at all in your quest to collect the judgment.

Is it legal for debtor (or usual pattern for any one) to keep $18,500 plus another $10,000 as currency, for over 6 years, without any proof of linking that currency to the rents received from another property and the job from his wife, and use that currency now for purchase new properties?

Yes, it's legal. There is no law against that, and why should there be? Nothing about that harms anyone else.

 

[gabrial99]

Adjusterjack: Debtor damaged the walls,flooring, kitchen, etc.

Taxing matters:

"While I've not researched your state specifically, a number of states that recognize TBE property apply a presumption that property held husband and wife is TBE, absent evidence to the contrary. In short, the burden likely falls on you to prove it's not TBE property. " Florida has strong TBE law. The rents and any income received from TBE is also considered as TBE. I think you are talking about the old TBE property the debtor and his wife have.

"Moreover, it is quite possible the taxpayers did indeed report the income for the year they got the money and can point to that on their returns." Yes, their tax returns show that the debtor and his wife had income in the past (6 years and before) from the old TBE property but there is no proof to show that they kept that income as cash: no statements from banks to show that they withdrew currency. The same is true with debtor's wife's job: she stopped working almost 8 years ago but she earned more than $40,000 salary during that time, and their tax documents prove that, but there is nothing to prove that she (or they both together) kept that salary as currency all these years: no statements from banks to show that they withdrew currency. The debtor and his wife are saying that they simply don't have bank transaction documents to show that they withdrew currency during that time and they have no obligation to keep those bank transaction documents.

Whether the above information (that is, debtor's wife has salary more than 7 years ago, they together have TBE income almost 6 years ago; but no proof to show that they withdrew currency from banks almost 6 or 7 years ago (or earlier) and kept that currency with them all these years) helps me in any way, or favors the debtor?

 

[adjusterjack]

Adjusterjack: Debtor damaged the walls,flooring, kitchen, etc.

Did you make a claim under your insurance? Depending on the type of policy and the form number, a lot of that might have been covered if the damage was beyond normal wear and tear.

 

[gabrial99]

Insurance does not cover these losses: court also determined this, and it is a big story which I cannot mention here.

 

[quincy]

Insurance does not cover these losses: court also determined this, and it is a big story which I cannot mention here.

If this is a “big story which [you] cannot mention here,” perhaps you should discuss these losses with an attorney in your area who has access to all of the facts and can keep them private.