Legal Definitions - concealed debtor

A concealed debtor refers to an individual or entity that owes money (a debtor) and is intentionally hiding their location, assets, or financial information to avoid paying their debts or facing legal action from creditors.

This term implies a deliberate effort to evade obligations, making it difficult for those owed money to locate the debtor or seize their assets to satisfy the debt.

• Example 1: Individual Evading Personal Loans

  Imagine a person who has accumulated substantial debt from personal loans and credit cards. When collection agencies begin to pursue them aggressively, they suddenly move to a different city, change their phone number, close their existing bank accounts, and start working a cash-only job without a formal record. They intentionally avoid any communication or public presence that could lead creditors to them.

  Explanation: In this scenario, the individual is a debtor who is actively concealing their whereabouts and financial activities to prevent creditors from locating them and collecting on the outstanding loans. This makes them a concealed debtor.

• Example 2: Business Hiding Assets Before a Judgment

  Consider a small manufacturing company that is facing a significant lawsuit for a defective product. Anticipating a large financial judgment against them, the company's owner quickly transfers all valuable machinery, intellectual property rights, and cash reserves to a newly formed shell corporation registered in a different state, making it appear as though the original company has no assets left to satisfy any potential judgment.

  Explanation: Here, the manufacturing company is a debtor (or soon to be one, pending the lawsuit's outcome) that is concealing its assets. By moving its valuable property to another entity, it is attempting to prevent creditors from seizing those assets, thereby acting as a concealed debtor.

• Example 3: Parent Avoiding Child Support Obligations

  A parent is legally ordered to pay monthly child support. After a few months, they stop making payments. To avoid enforcement actions by the court or the other parent, they quit their job, move out of their last known address without providing a forwarding address, and begin working odd jobs for cash, deliberately staying off official payrolls and avoiding any public records that could reveal their new location or income.

  Explanation: This parent is a debtor, owing child support, and is actively concealing their location and sources of income to evade their legal financial obligation. Their actions classify them as a concealed debtor.