There’s no denying that dealing with debtors can be challenging, especially if they are lying about their wealth and financial situation. Though some debtors are honest about their finances, and are genuinely struggling to repay, this isn’t always the case. In fact, some debtors could be lying about how much money they have in order to avoid being chased for outstanding payments.
5 Telltale Signs Your Debtor Could Be Lying About Their Finances
- Conflicting Financial Information – One sign of a debtor lying about their wealth is inconsistent financial documentation, or documentation that conflicts itself. Documentation could be anything from tax returns and bank statements, to income reports and invoices. It’s important to find any irregularities in the documentation, as this could be a sign that your debtor is hiding how much money they have. For example, if they have transferred a large amount of money, but it’s unclear where they have transferred it to.
- Lots of Legal Changes – Some debtors rely on frequent legal changes to hide their wealth, such as filing for bankruptcy more than once, or protecting their valuable assets by hiding them amongst complicated legalities. When there are a lot of legal changes, it’s a lot harder to know how wealthy they really are. This can make it difficult for you to determine how much money they truly have, and how much they are capable of paying.
- Hiding Assets – Debtors who are lying about their finances often conceal valuable possessions, such as property and vehicles. They might hide them, lie about owning them or transfer ownership to someone else, making it difficult for the asset to be included when you are determining their financial standing. By hiding assets, debtors can significantly reduce their wealth.
- Lack of Cooperation and Dishonesty – More often than not, debtors who are genuinely struggling to repay a debt will be open and honest about their finances. They will provide you with the information needed to find a solution, such as agreeing on a payment plan. But, debtors who are lying about their wealth tend to do the opposite, and you might find that they don’t want to cooperate. They might avoid discussing the debt, avoid meeting with you or fail to answer questions about their finances.
- Income and Lifestyle Mismatch – If a debtor’s income doesn’t appear to match their lifestyle, it could be a sign that they are lying about their wealth. They might claim to have a limited income and no savings, but this is unlikely to be true if they are living a lavish lifestyle. Going on a lot of holidays, buying designer items, regularly eating out and living in an expensive property are all signs that a debtor could be hiding their wealth.
There’s a lot that goes into getting someone to repay money that they owe, especially if they are going to great lengths to lie about their wealth. But, we are here to help. Find out more about debt collection and debt recovery by getting in touch with our experts.
