We sometimes underestimate the resourcefulness of those who try to out-run their judgments. The lawyers who chase and collect those judgments need to be a step ahead. Judgment debtors have the right to plan asset protection through sophisticated devices, and the lawyers who collect those claims by necessity must be equally sophisticated. Often, the assets are located or transferred overseas so that satisfaction of the judgment by these assets are complicated by foreign law. I will assume for purposes of this article that there is no low hanging fruit for garnishment or execution because this information is concealed from the creditor. Nor is it necessary to discuss recovery of fraudulent conveyances here. Instead, I provide some useful tools to help collect judgments.

Electronic Investigation of Judgment Debtors

I have found it useful to conduct an electronic investigation on judgment debtors as a first step in locating them and their assets. The electronic investigation will typically disclose lending relationships. Lenders typically will have received a financial statement and have assets and liabilities disclosed by the debtor. The electronic investigation will have real estate, car, boat, social media information, cellphone numbers and other digital footprints. The investigation may also disclose business interests of the debtor which may be the holder of assets. The electronic investigation will provide third-party sources to obtain information if the debtor is not forthcoming in asset discovery. If assets are located in a jurisdiction where the judgment is not filed, then consider domesticating a judgment where the assets are located to enable execution.

Asset Discovery From the Debtor

Court rules universally allow the creditors to obtain information from the debtor. Some state statutes require a deposition first before obtaining paper discovery. Others require written questions first before an oral examination. Some states allow discovery in any sequence. If an electronic investigation has already been conducted, then the questions to ask will come into focus.

Debtors often do not respond to discovery demands in aid of execution. Service of process may be difficult even with the benefit of electronic investigation. It is essential that credible service or alternative service by court order be effected to allow full implementation of creditor rights. Many debtors fear post-judgment discovery not only because they will lose assets, but also because they will incriminate themselves and others. They avoid filing bankruptcy for similar reasons. This means that a creditor must proceed aggressively against third parties which have information or assets for execution.

Some states allow creditors to move for contempt against the debtor if the debtor frustrates discovery. Some state actually authorize a warrant for arrest of the recalcitrant debtor, but finding locating the debtor for arrest by law enforcement, even with the electronic investigation, maybe difficult. The debtor may be outside the jurisdiction for service and enforcement of the discovery. But the electronic investigation may lead to the identification and location of assets. The creditor must preserve the ability to execute on the assets.

Freezing the Debtor’s Assets

Some states by court rules provide for relaxed standards for freezing assets of the judgment debtor. The rationale is that by avoiding future transfers, the assets will be available for execution. Such asset transfer injunctions should be obtained as early in the case as possible, but sometimes a court will require a showing of attempted post-judgment discovery which was frustrated by the debtor. Again, the electronic investigation may support obtaining an asset transfer injunction early in the collection process, particularly if it shows frequent transfers, numerous judgments or inequitable conduct by the debtor.

One of the limitations on asset transfer injunctions is that the intended recipient of the asset may not know that the asset transfer is enjoined. To prevent such defenses, it is necessary to serve the assets holders with an order binding them from receiving the transfer, and to somehow publicly mark the assets to put future transferees on notice. The court rules may be flexible enough to allow marking real estate assets subject to the injunction order with a lis pendens.

Injunction Against Debtor Asset Shielding Through Limited Liability Companies

A judgment debtor may convey assets before the judgment is entered to limited liability companies (LLCs) in various jurisdictions in order to shield the assets from execution. Each state has different laws governing execution and liquidation of LLCs to pay debts of their members. The laws are a patchwork quilt without any uniformity.

When such a transfer has occurred, the creditor should name the LLC in the injunction motion, serve the LLC and enjoin the LLC from transferring the asset pending discovery and perhaps a fraudulent conveyance claim.

Charging Orders and Sale of LLC Membership Interests

If the debtor owns stock in a business corporation, the stock of the corporation is available for execution by serving the debtor or the corporation with a writ of execution. If the corporation owes money to the debtor, the creditor may garnish that money, just like garnishing a bank account.

But unlike corporations, creditors may not garnish partnerships or LLCs. Creditors must file a motion for a charging order, which acts as a garnishment, but takes into consideration the voices of partners or members and allows an objection that such charging order will unfairly disrupt operations. Similarly, sale of a partnership interest or a membership interest of an LLC is also subject to additional protections from the court for the benefit of innocent partners and members. Courts may protect the innocent owners from having a stranger, like the executing creditor, from becoming their involuntary co-owner. For this reason, most state laws do not allow execution and sale of ownership interests in partnerships and LLCs unless the debtor is the sole owner.

Courts impose a high bar on the execution sale of partnership and LLC membership interests. Some prohibit it entirely. Others prohibit it unless the creditor can show that the charging order for payment of the judgment has not been satisfied after a reasonable period of time and that the judgment debtor is the sole owner of the partnership or the LLC. In these cases, a creditor is relegated to appointing a receiver for the partnership or LLC in order to make sure the charging order is paid.

Conclusion

For international judgment collection, it is best to hire international asset investigators, who have enhanced connections (informants) and techniques for obtaining judgment collection information. The strategies are the same whether the judgment collection is domestic or international. The steps are to collect the information, prevent dissipation of the assets, and execute on assets whenever possible.

Reprinted with permission from December 23, 2025 issue of The Legal Intelligencer© 2025 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.