Exploring the Feasibility of Contingency-Based Asset Searches

  • June 6, 2023
  • 5 min read

Is it possible to hire a private investigator on contingency?

Meaning, you don’t have to pay the investigator upfront for the asset search. Instead, you only pay them if they find assets and you recover them. This arrangement would be ideal for debtors or victims of fraud since they wouldn’t have to spend additional money out of pocket to search for assets and recover their judgment or fraud case. You would give the money to the investigator only after you recover, so there is nothing to lose. Is this possible? Well, there are a couple of reasons why it’s not possible, and even if it were, you might not want to pursue it.

Finding an asset

If an investigator is only paid upon finding assets, they wouldn’t receive anything upfront. Consequently, they might not invest much time or effort into the search. They would likely focus on the accessible assets that are readily discoverable, as those would guarantee them a quick profit. If finding the assets requires significant time and money, they wouldn’t want to go into a negative financial situation. As the creditor or victim, the investigator would be less inclined to do so if you are not willing to pay upfront. If you hesitate to pay for an asset search, why would an investigator be motivated to take on the case? You might argue that there is a substantial upside for them, but it’s not without risks. Instead of you spending money on the case, the investigator would be spending it. Hence, they might find accessible assets, but if there’s nothing substantial to recover, they will likely drop the case and focus on clients who are willing to pay them.

Recovered Funds

There are factors beyond the investigator’s control regarding the receipt of recovered funds. For example, let’s say a private investigator finds a million dollars in an account that could satisfy your judgment or hidden assets worth hundreds of thousands of dollars to repay your fraud. However, they cannot seize these assets themselves; a court-issued writ of garnishment is required. By law, these funds or assets must go directly to the creditor, meaning they must go directly to you. The investigator has to trust that you will give them their share, as they cannot take it in advance. This factor is outside their control. What if, two or three years later, you decide not to give them the money? They are then in the same position as you were, owed money and having to pursue you legally. Therefore, there are uncertainties surrounding the investigator’s receipt of payment. Additionally, the investigator may not know the full details of your case. While you believe in the validity of your judgment or claim, they would need to conduct a comprehensive investigation to ensure it is legally valid and still enforceable.

There may be prohibiting factors, such as a default judgment, that prevent the immediate transfer of funds. The investigator is not aware of these legal intricacies and would have to spend time and money, potentially involving attorneys, to verify the validity of the judgment.

Red Flags

Furthermore, investigators might view your unwillingness to risk your own money as a red flag. If you are not confident enough in your judgment to invest any amount to hire a professional to find the assets, it signals uncertainty. From the investigator’s perspective, if you doubt the strength of your case, why should they put their money at risk? While some investigators might accept the case and search for easy money, they would abandon it if no assets are found. They might send you occasional messages assuring you that they are still working on it, but they won’t expend significant time and money to find assets when no income is coming in.

Moreover, in most states, it is illegal for investigators to work on a contingency basis. Licensed private investigators hold a valuable license granted by the state, and in most cases, the terms and conditions of that license prohibit working on contingency. This limitation exists to ensure that investigators focus on gathering factual evidence, without incentives to fabricate or engage in illegal or sketchy practices to discover assets. Attorneys, in some narrow situations, can work on contingency because they are officers of the court and must adhere to specific criteria. However, investigators are generally not allowed to work on contingency. This is the fourth reason why it’s not possible or advisable.

Conclusion

there are five or six compelling reasons why investigators cannot work on a contingency basis. Even if they could, it’s not a recommended course of action. It is ill-advised to opt for the cheapest option when your money is at stake. Hiring a brain surgeon solely based on their low price would be unwise. Similarly, if recovering your money is important, it is crucial to do it properly and avoid fly-by-night or illegal approaches. Asset searches on contingency are not a viable option. If it’s not worth spending money to hire a competent professional for asset search, it’s best to accept your losses and not proceed further. While you can find investigators who are willing to work within your budget and offer reasonable deals, you shouldn’t compromise on the importance of doing things correctly.

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