Secrecy has been a part of asset protection planning for a long time. According to an article in Forbes.com: “Some folks don’t want their competitors to know how well or how poorly they are doing, or that they have made key investments or divested assets.” The article further says: “Some folks think that the less potential claimants can find in potential assets, the less of a target they are to lawsuits”. Thorough asset investigations can help reveal any hidden assets and properly identify a debtor’s possessions.
It is not uncommon for an individual or company to hide substantial assets in any way possible, especially if it means avoiding the possibility of paying out money. When any asset is transferred with the purpose of defrauding or delaying discovery by anyone identified as a creditor, then it is considered to be a hidden asset. This can be anything from real property to stocks, bonds, and money. The most difficult to discover of all hidden assets are those that are located outside the country.
If a debtor refuses to pay, this does not necessarily mean he has no money to do so. In fact, some debtors may actually have lots of money and assets that they are hiding in the hope of avoiding their obligation. If, through an examination, a creditor can show that the debtor had kept some assets hidden with the purpose of delaying or trouncing the collection rights of his creditors, than a fraudulent transfer can be established.
The creditor must then acquire a claim or court decision against the debtor’s property. In many cases, the court will not brush aside the fraudulent transfer if the debtor owns assets sufficient to pay the debt. Every asset that can be used as payment for the debts could be regained by creditors.
Asset investigations may involve a nationwide search of records in order to find out any personal property owned by the debtor. An expert investigation could reveal track records of fraud, if a fictitious business name is being used, or if there are any hidden assets.
In cases of suspected hidden assets, a creditor may hire an asset investigation firm, such as Phenix Investigations, Inc., to look into the situation and determine if there are, in fact, assets that were hidden on purpose and with the intent of avoiding a collection of payment.
(Source: Secrecy Does Not An Asset Protection Plan Make, Forbes, January 14, 2015)