Sometimes we’re faced with collecting money from a person or entity who can pay if they want to, but has set up their structure in a way so that they are often successful in not paying when they don’t want to.

Under such circumstances, it can be helpful to concentrate on what I like to call “pressure points”: places of discomfort that can influence the debtor’s willingness to pay. Those pressure points can involve creative use of the legal process. A couple of examples should help illustrate this.

In our first example, our debtor was a tavern, and our client (the creditor) had supplied foodstuffs, hard goods (crockery, glassware, silverware), and the bar’s tap system for beer. There was a UCC-1 security interest filed with respect to the tap system. Such a system involves the installation of tubing runs from a cold room (usually a walk-in cooler holding the kegs) to dispensing points (the “taps”) behind the bar.

Now, about the last thing a creditor usually wants is a repossessed used tap system pulled out of a debtor’s bar. But perhaps that is exactly the thing that should be pursued with the most vigor…or should I say, apparently pursued with the most vigor. In this type of situation, the debtor’s credit is going to be compromised, particularly in the trades. The likelihood of the debtor obtaining financing for another tap system is nil (they often run more than $20k). While the tap system is worth little to the creditor, it is, from the debtor’s immediate standpoint, virtually irreplaceable. Many taverns cannot realistically survive without such a system.

Accordingly, our inclusion of a cause of action for repossession (in New York, “replevin”) in the lawsuit, and the resulting concomitant danger of losing that tap system, was a powerful incentive for that debtor to enter into workout arrangements acceptable to our client. And the debtor stayed in business; a win-win result.

In our second example, the creditor (our client) held a substantial judgment against the debtor, and the debtor’s former principal was personally liable. Our client was fairly certain that debtor had substantial funds in the United Kingdom, unreachable by a New York court. There was nothing of any real substance reachable in New York, and the debtor had most of his expenses paid by an out-of-state trust. He was indeed a ‘professional debtor’…and he was good at it.

Our client knew a great deal about the individual debtor in question; he was highly visible in his community as a man about town—on charitable organization boards, at political events, in the social pages, at groundbreakings, and so on. He had a favorable public image.

In New York, as in many jurisdictions, there is wide-ranging latitude to conduct post-judgment depositions of not only the debtor, but of anyone else who might shed light on the debtor’s assets—what they are, where they are, and so on. Some of that can be determined from a debtor’s spending patterns. So in this case, as the creditor’s attorney, we prepared a number of deposition notices to people who knew or did business with the debtor who would be aware of at least some aspect of his spending: the president of his country club, the United Way chairman, the debtor’s adult children and wife, the maitre’d at the debtor’s favorite restaurant, the owner of the gym where the debtor worked out, the neighbors on each side of and across the street from the debtor’s home, the owner of the luxury car dealership patronized by the debtor, and so on.

Although we had no obligation to do so, we then sent copies of those subpoenas (there were ten or twelve of them) to the debtor’s attorney, advising him they would be served in ten days. Of course, the pressure point of this approach was not in actually serving the subpoenas, but in being able to do so.

Debtor’s counsel called us, chuckling. And then the matter settled with the magical appearance of a six-figure lump sum from a supposedly ‘assetless’ debtor.

So especially in larger matters, know your debtor to the greatest extent possible, be creative, and think about pressure points!