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.
Other assets that are exempt from bankruptcy can include:
Wages you earn after you file for bankruptcy. Money you receive from alimony and for child support. Social security benefits. Life insurance.
Judgment creditors can only seize property that isn't protected by an exemption. This includes real property and personal property.
When a judgement is granted, a creditor can apply for a warrant where the sheriff can attach goods such as your furniture and sell these to pay your debt.
In System 1 (also known as § 704 exemptions), you can exempt real or personal property you reside in at the time of filing for bankruptcy, including a mobile home, boat, stock cooperative, community apartment, planned development, or condominium, up to $600,000 - 704.730.
“Nonexempt assets are those that can be sold by the trustee assigned to your case by a bankruptcy court.” Some examples of nonexempt assets include: Vacation homes or other properties that are not your primary residence. New or expensive cars. Musical instruments that you do not need for work.
To open a bank account that no creditor can touch, a person can (1) use an exempt bank account, (2) establish a bank account in a state that prohibits garnishments, (3) open an offshore bank account, or (4) maintain a wage or government benefits account.
If you want to avoid having a creditor levy your bank accounts, you need to pay your debts. If you have a debt that you don't have enough money to pay, set up a payment plan to give yourself more time to pay. Most state and federal taxing authorities will work with you on this, as will many creditors.
A bank account levy allows a creditor to legally take funds from your bank account. When a bank gets notification of this legal action, it will freeze your account and send the appropriate funds to your creditor. In turn, your creditor uses the funds to pay down the debt you owe.
Under California asset protection laws, private retirement plans are protected are protected from creditors. This protection applies both before and after distribution to the debtor. Private retirement plans are defined as including profit sharing plans, IRAs (theoretically), and self-employment plans.
What is a Homestead? California allows homeowners the ability to declare property their “homestead” if it is their primary residence. This declaration establishes that a certain amount of equity you have accrued in your home is considered off-limits (exempt) to creditors.
Any federal, state, or local government financial assistance made in response to the COVID-19 pandemic, including CARES Act stimulus payments, are exempt from any attachment, levy, execution, or garnishment. You won't have to complete a form or make a motion with the court to protect the funds.
In California, the statute of limitations for consumer debt is four years. This means a creditor can't prevail in court after four years have passed, making the debt essentially uncollectable.
Although the law provides that one cannot be imprisoned for non-payment of debt, the obligation to pay what you owe another will always stand. As you may have read above, one can never escape the liability to pay, no matter how lenient you think the law is.
The relevant information to focus on here is that California is a community property state, which means that legally married couples jointly own everything – including debt. As a result, it is possible for a creditor to garnish a spouse's bank account if their spouse owes a debt.
The Short Answer: Yes. The IRS probably already knows about many of your financial accounts, and the IRS can get information on how much is there. But, in reality, the IRS rarely digs deeper into your bank and financial accounts unless you're being audited or the IRS is collecting back taxes from you.
The U.S. government has worked hard over the past decade to stop Americans from hiding bank accounts offshore to evade taxes. But not hard enough. It has become more difficult to maintain secret accounts, but it's still happening, as recent examples show.
Another option you have is by clicking 'Account Overview' from the main nav and clicking the three dots on the account you wish to hide. From there, select 'Settings' and under 'Account Visibility' you can toggle 'Account Overview' and/or 'Financial Tools' to hide the account.
Envelopes, both in desk drawers and stuffed under couch cushions. Purses and their contents, such as wallets, lipstick holders, and compact mirrors. Inside cookie jars. Cans, including food cans and other cans packed away in the garage or attic.