Many have asset protection legislation that generally favor foreign trust settlors and/or LLC founders. Establishing an offshore LLC and/or asset protection trust may be one of the only ways you can protect your assets from a U.S. court judgment.
A creditor can merely review your past checks or bank drafts to obtain the name of your bank and serve the garnishment order. If a creditor knows where you live, it may also call the banks in your area seeking information about you.
So, to hide or protect your assets from creditors or divorce, there are a couple of obvious options for you. This website covers them extensively. For your personal assets, such as your home you can hide your ownership in a land trust; and your cars you can hide in title holding trusts.
Can a creditor take all the money in your bank account? Creditors cannot just take money in your bank account. But a creditor could obtain a bank account levy by going to court and getting a judgment against you, then asking the court to levy your account to collect if you don't pay that judgment.
That type of trust in California is permitted and can function fairly effectively to shield assets from the children's creditors as long as those assets remain in the trust. But someone cannot gain the same protection if they are the creator of the trust and the beneficiary of the trust.
The short answer is no, a debt collector cannot take your house. However, a creditor whose loan is secured by your house can foreclose on the loan and take the house, and depending on your state laws, a debt collector without a security interest in your home may be able to put a lien on it.
In many states, some IRS-designated trust accounts may be exempt from creditor garnishment. This includes individual retirement accounts (IRAs), pension accounts and annuity accounts. Assets (including bank accounts) held in what's known as an irrevocable living trust cannot be accessed by creditors.
Phone directories, printed or online, are good sources of names, addresses, and phone numbers. If a collection agency has your phone number, it may be able to find your address using a reverse directory. A reverse directory lists telephone numbers in numeric order, rather than by name.
When a judgment has been entered against you, creditors can take some of your income or your “assets” to pay back the money you owe. Assets are things you own, like a bank account, a car, or jewelry. But, you can keep some of your income and assets safe from most creditors.
In this way, living trusts are similar to wills. ... Its primary purpose is to avoid probate court, since revocable living trusts do not reduce estate taxes. With a revocable trust, your assets will not be protected from creditors looking to sue. That's because you maintain ownership of the trust while you're alive.
The best kind of Trust for keeping one's assets safe from creditors and court judgments is an irrevocable trust; once created, the grantor cannot change it.
All states have designated certain types of property as "exempt," or free from seizure, by judgment creditors. For example, clothing, basic household furnishings, your house, and your car are commonly exempt, as long as they're not worth too much.
With a judgment against you, a home, car, jewelry, bank account, and any other valuable assets may be up for grabs by creditors. If you don't have any valuable property and you're not earning any income, you may be “judgment proof.” A judgment proof debtor is safe from a court judgment for collection.
The lawsuit is not based on whether you can pay—it is based on whether you owe the specific debt amount to that particular plaintiff. Even if you have no money, the court can decide: the creditor has won the lawsuit, and, you still owe that sum of money to that person or company.
A creditor or debt collector cannot freeze your bank account unless it has a judgment. Judgment creditors freeze people's bank accounts as a way of pressuring people to make payments.
Can the bank freeze my account without notice? Yes, if your bank or credit union receives an order from the court to freeze your bank account, it must do so immediately, without notifying you first.
Limits to garnishment by debt collectors
Federal law limits garnishment on your wages to a maximum of 25% of disposable earnings.
Most financial experts end up suggesting you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000. Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.
“We would recommend between $100 to $300 of cash in your wallet, but also having a reserve of $1,000 or so in a safe at home,” Anderson says. Depending on your spending habits, a couple hundred dollars may be more than enough for your daily expenses or not enough.