Collecting Debts owed to Your Debtor
Debts owed to Your Debtor can be Reached in Satisfaction of a Debt – Money Had and Delivered
I am frequently asked whether a third party can be sued for a debt or part of a debt when money has been provided to the third party as part of another transaction. My answer is sometimes, yes. In a recent case litigated by Cellai Law we were enforcing a Judgment from the Federal District Court, District of New Hampshire against an individual defendant. In looking at the documents of the underlying transaction (just to be thorough even though there was already a Judgment and because the underlying matter that was handled by a different attorney), it became clear that monies were paid to different third parties (in this case family members). According to the client, the main contracting debtor claimed that she needed the money sent to her relatives because she did not have access to her bank accounts. Cellai Law sued the additional parties who received the funds under the theory of “money had and received.” Under the theory of money had and received, if you receive money gratuitously, or which you were not supposed to receive, you are obligated to pay it back. The Norfolk County Superior Court entered judgment against all of the various family members that received money on the money had and received claims.