Filing a civil lawsuit and winning a monetary award does not automatically guarantee receipt of that award. In other words, civil judgments aren’t always paid on time and in full. It is not unusual to spend thousands on legal representation and court costs only to wind up with nothing but a piece of paper that says you’ve won.
Fortunately, creditors have a very powerful tool they can leverage to determine whether suing someone is worthwhile. That tool is the internet. Used as a pre-lawsuit due diligence tool, it can give some much-needed perspective that could help a person avoid losing a ton in civil litigation
Debtors used to have the advantage in civil litigation. And their advantage was a big one. Three decades ago, it was fairly easy to pack up and move to avoid paying a money judgment. It was easy to disappear long enough for a judgment to expire. That advantage has since disappeared.
Discovering Income and Assets
Income and assets are the two biggest factors when it comes time to collect a money judgment, according to Salt Lake City-based Judgment Collectors. Does the debtor have sufficient income to pay? Does he have assets that can be leveraged for payment?
A debtor with insufficient assets and income could be deemed judgment-proof if he also has no reasonable prospects for the future. Here is why it matters: trying to collect from a judgment-proof debtor is a fool’s errand. It is like trying to get blood out of a stone. A judgment-proof debtor is not worth suing because you will get nothing out of him.
As a pre-litigation tool, the internet can be utilized to better understand a debtor’s income and assets. If a thorough investigation reveals that a debtor is judgment-proof, there is no point going to court. But if an investigation reveals considerable assets and income, then proceeding to court is probably a good idea.
The Same Resources Professionals Use
Using the internet as a pre-lawsuit due diligence tool leads to an important question: what online resources to creditors have at their disposal? The same resources that professionals use. Many of the resources are encapsulated in public records, including:
- Property Records – Every real estate transaction within a county generates a public record published by the county clerk. All the records are freely accessible online. If a debtor has purchased or sold a piece of property, there is a record of it.
- Court Records – Court records are mostly public as well. They could reveal whether a debtor is involved in any other lawsuits. Court records can also reveal things like probate information and a debtor’s physical address.
- Business Records – Certain types of business records are maintained at the local, state, and federal levels. Such records give insight into a debtor’s personal finances.
The beauty of public records is that they can be freely accessed, usually with no attached expenses. When government entities do charge fees, those fees are nominal.
Social Media Information
Creditors can and should include social media in their pre-lawsuit due diligence. Social media posts can reveal a lot about a debtor’s financial status. If a debtor routinely posts about travel, leisure activities, personal possessions, etc., it’s a safe bet he has at least some resources that could be utilized to pay.
Taking someone to court isn’t always a wise idea. A plaintiff could spend thousands of dollars and have nothing to show for it. So to avoid such costly mistakes, it is best to conduct due diligence before filing a lawsuit. The internet is a great tool for doing so.