When a Defendant Tries to Avoid Paying a Judgment, What Are Legal Means to Force the Issue?

Going through a personal injury lawsuit is often difficult enough, especially if the defendant refuses to make a reasonable settlement and insists on taking the case all the way through a trial. Once you've won your lawsuit, collecting the judgment should be easier—except some defendants seem willing to do just about anything to avoid paying.

If you're having trouble collecting a personal injury judgment, you aren't alone. Here's what you should know about the types of tricks some defendants will use and what can be done to stop them.

Financially savvy defendants may try to hide assets to avoid paying.

A financially savvy defendant, particularly one with his or her own business, may try to hide assets in order to claim that he or she can't afford to pay. Some common tactics used are to try to hide personal assets in the company's name, using multiple companies to make it harder to figure out where ownership of some asset is held (making it harder to get a court order forcing it to be sold), undervaluing personal net worth, hiding funds overseas, and shifting assets into the names of other relatives or friends.

For example, New York construction magnate James Lomma, who described himself as the "Crane King," filed bankruptcy the day after he lost a personal injury lawsuit brought by the families of two men crushed to death when one of his cranes collapsed. He's appealing the verdict in the case, but he apparently didn't want to take any chances the families might collect in the meantime. He claims he doesn't have the money to pay the $96 million verdict, despite the fact that attorneys for the victims put his net worth at around $200 million. 

The plaintiffs' attorneys accuse the "Crane King" of moving assets into a company that he put under his daughter's name to avoid listing in the bankruptcy, of holding onto assets that could be sold to pay the judgment (like a leather-seated personal plane worth $4.6 million, and hiding his true assets. They say he's trying to manipulate the legal system.

Savvy attorneys can prepare for these sorts of tactics ahead of time.

One of the things that an attorney can do to stop this sort of thing from happening include anticipating it. For example, the attorney's for the plaintiffs in the crane collapse case were ready for the "Crane King" to do what he did. They immediately challenged the original net worth he assigned to himself in the bankruptcy pleadings, causing him to revise his earlier estimate of his net worth from only $58 million to $118 million. They also got a judge to order him to put $1 million a month in escrow while the appeal goes on.

Attorneys can also take other steps to enforce a judgment. They can challenge the bankruptcy at the meeting of creditors or file an adversary proceeding. They can use other legal means, like interrogatories, requests for a production of documents, and depositions to try to uncover hidden sources of income and assets. If the debtor has wages, his or her paycheck can be garnished. Tax returns may be able to be diverted. Bank accounts can be garnished.

If you're concerned that the defendant in your case will try to avoid paying up, talk to your personal injury attorney about getting ready for the challenge—that way you can respond quickly to things like bankruptcy filings with filings of your own to encourage the court to hold the defendant liable.