TAKING THE MISSED
POT OF GOLD
Can even the worst case judgment be collected? Maybe. We’ve all seen judgments that at first glance appear to be uncollectable. We had a judgment that involved three debtors, but our research found that two had filed bankruptcy and our debt had been discharged from both of them, leaving only one debtor to look for recovery. Further research showed that the remaining debtor had over $2,000,000 in Federal and state tax liens, numerous civil judgments, he had lost all his real estate holdings, and had a credit report filled with debt, charge-offs and collections. A search of the DMV found that his car was over ten years old and had little or no equity. We even found that the debtor had recently been garnished at his part- time job at an office supply store by the IRS, but he quit before his next paycheck could be garnished. Bottom line: we were at the end of a long line of creditors that were after a hardened debtor that had no known assets, making this kind of case the very definition of uncollectable.
However we checked further and performed an online search of the state’s Unclaimed Funds Division (Colorado) where we found funds listed in the debtor’s name. The problem we had was our debtor had a very common name (think ‘John Smith’ type of name) so it was difficult to discern which of the funds, if any, belonged to our specific party. The state’s free search results only gave us the claimant’s name and the town where their address was located. Not even the amount of the unclaimed funds was shown. Based on what we saw, we felt we had lots of possibilities and nothing to lose, so we had our legal counsel send off a Writ of Garnishment with Notice of Exemption and Pending Levy to the Office of the State Treasurer and crossed our fingers.
Shortly thereafter we received a return of the writ stating that the debtor had only $3.20 being held by the state. Obviously this experiment appeared to be a bust, but upon further review of the situation we realized we had made the mistake of providing the state with just the debtor’s name, personal identifiers, and his most recent address. We discovered that the funds are actually organized in Colorado by the claimant’s NAME and ADDRESS, and they are not generally associated with any dates of birth or other identifiers. The state can only research and find funds with what you provide, so we sent back the writ to the Treasurer with a detailed list of sixteen known addresses where the debtor/claimant had lived. This time we received back a list of several thousand dollars in unclaimed funds which we recovered toward the satisfaction of the judgment. Persistence pays off!
The takeaway here is that we were able to recover funds from the debtor when there was more than $2,000,000 in liens from creditors that where recorded ahead of us. Obviously you’ll have to keep in mind that each state is going to have their own way of organizing claims for searching, but with a little digging, you may just find your own pot of gold.
REAL COURT CASE NAMES
Schmuck v. United States
United States v.
Ninety-five Barrels (More or Less) Alleged Apple Cider Vinegar
South Dakota v. Fifteen Impounded Cats
United States v.
11 1/4 Dozen Packages of Articles Labeled in Part
Mrs. Moffat’s Shoo-Fly Powders for Drunkenness
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