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Safe places to keep money when you have judgements against you


nriw
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Hey guys,

 

I have about 6k which I need for living expenses. I've defaulted on 30k so my creditors can wipe me out completely if they levy an account with funds in it.

 

My situation is complicated by the fact that I need to take payments by Paypal (for some freelance work).

 

Is Paypal a dangerous place to keep money? I assume so.

 

I'd guess that physical currency is the safest from judgments, but obviously carries other risks.

 

I have an Amex Bluebird reloadable prepaid debit card that doesn't attach to a related bank account (that I know of). Are those safe to store money on?

 

Are there any safe places I can ask a client to send a check to be cashed, that will be somewhat safe against a bank levy?

 

Feels like I'm in one of those dystopian police state movies now as the guy on the run. Thanks for any help.

Edited by nriw
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I have had that stress from creditors as many have. First things first. Are you delinquent or do they have judgements against you?

 

If your just delinquent then do what you can to stave off a judgement situation. If these are judgements, you could be brought in from of the court for the "Debtors Examination". Until then keep your money in an out-of-state credit union or small out-of-state bank that does not have branches in your state until you can negotiate with them. Most judgement creditors won't go across state lines to levy accounts, it is already difficult enough for them to find your bank within the state you live in. You make it easier for them if you bank with a national bank like Chase or BofA. In addition, different states have different rules and they may have to do additional legal work there to levy your accounts and it is often not worth their time and money.

 

If the creditor has a judgement they can get your current bank records and levy your account if they can find who you bank with. They don't send a blanket levy out to all banks, they have to be specific. Don't move money directly between your current bank accounts and the new account as that could tip them off to where your new account is. Don't pay your bills directly from that account and don't have your direct deposits go there.

 

Nothing will completely stop a creditor that really wants to collect. If they are willing to spend the time and money to enforce their judgement they can get your assets. But until they are willing to go to those lengths you can keep them at bay for a while.

 

Now if this is a State or Federal debt, they have more resources to know where your assets are so then you may be out of luck and paypal and prepaid cards may be your best bet. But these are are easier to negotiate with, as you can often get into a repayment plan that will work for you. And yes, they they have the ability to put your levy on hold if you have little income. There are forms you can fill out. Most courts also have forms you can fill out that will prevent the actual levy if you don't have sufficient income and assets. But I am sure every jurisdiction is different.

 

It would be in your best interest to find those forms now so you know what you are dealing with and what can be included and excluded.

 

 

Edited by frank92555
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Honestly it seems like bankruptcy is a far safer option although more painful long term. I don't actually need credit for much as I am not a big spender.

 

I did eventually want to get into real estate investment but I guess I'll have to partner with someone else for the next 10 years or stick to 100% private financing (after 4 home loans most experiences investors have to do this anyways)

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  • 2 weeks later...

I’d see if an ITF or similar account with a child beneficiary shields you. An account in your name but legitimately in trust for a child. If that can apply. Better then a levy. Some variations of this theme work because the money does not really belong to you. Only a lawyer can guide you optimally. Just tossing out some ideas...

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10 hours ago, busted2 said:

I’d see if an ITF or similar account with a child beneficiary shields you. An account in your name but legitimately in trust for a child. If that can apply. Better then a levy. Some variations of this theme work because the money does not really belong to you. Only a lawyer can guide you optimally. Just tossing out some ideas...

My bank account was partially protected because I put my kids SSI money into it. It was only up to a certain amount, but I never had much in there anyway while we were waiting for SOL to end. 

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401k, because the first $1m is exempt from non-government creditor judgements. If you owe back taxes, then your 401k will be subject to judgments, because your creditor now is the government.

Depending on your state of residence, IRAs could be exempt from non-government creditor judgements. But IRAs are not exempt from judgements if your creditor is the government.

Upon the successful completion of a bk, only non-government debts could be discharged. Taxes and government guaranteed loans (e.g. student loans, VA guaranteed loans, FHA guaranteed loans, etc ) are extremely and very difficult to discharge even under bk.

These are the lawful ways. I'm not an accountant or a lawyer

Sent from my LG-H932 using Tapatalk

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Purchase some American Express Travelers Cheques!

https://www.americanexpress.com/us/content/prepaid/travelers-cheques/learn-more.html

 

And there is no fee if you have a current AMEX card.  I have a few thousand in my bug out bag for emergencies, especially if the ATM's & Payment networks go down.  Now you don't want to go shopping with these at the mall, however you can use them to pay all your bills, such as utilities, rent, credit cards, etc. and you can always cash a few at your bank if you need cash.

 

However, unlike cash, if your Travelers Cheques get lost or stolen you can get them replaced!

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1) $30,000 is not very much debt and is probably not worth filing bankruptcy over. In fact, the debt service on $30,000 is so low that you might not even qualify for BK depending on your income.

 

2) You only wrote that you defaulted. You did not say there are actual judgments or lawsuits yet. Have you been sued yet? Is there a judgment? There is no reason to file for bankruptcy unless there is a judgment and they are actively trying to seize assets or garnish your wages. The odds are low that they will even file a lawsuit. Most do not.

 

3) Is this $30,000 with one creditor? Or is it broken up among 5+ creditors? The reason that matters is that most banks won't bother suing over small amounts. All they do is send it to collections for annoying phone calls and letters. If your $30,000 is broken up among 5-10 creditors then I highly doubt you will be sued. Even if there are is one or two with $10,000 to $15,000 each, the odds are low.

 

Back a few years ago when I had my defaults, I had a few accounts over $10,000+ each and none of them ever sued me. Just letters and phone calls until I told them to cease communications and then I got them deleted from my credit files. I did it all well before the SOL expired. 

 

4) Search your local court records online to see if your creditors have a history of filing lawsuits in your local county. That is your best indicator on whether you are likely to be sued in the future.

 

5) If there are actual judgments against you and you are REALLY worried, use prepaid debit cards. They won't find those. Pay your utility bills 3 months in advance. Pay your rent a few months in advance. Keep $1,000 in cash in the house.

Edited by RocketGoBoom
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4 hours ago, legaleagle2012 said:

There is no law that requires you to keep money in banks where creditors can get to it. The law only requires you to be truthful at a debtor's exam. It's a game, and they know it. Creditors will only spend so much time on finding assets.

 

That is very true. You can go into a debtors exam, be completely truthful about where your money is at that moment, then right after the exam goto the bank and take all of the money out in the form of cash.

 

Even if they are quick, it will take them a few days to get the bank to freeze the money.

 

Like everything else with lawyers, it costs the judgment creditor money to get a lawyer to perform a debtors exam. That is why it is so rare. 

 

Opening an account with a credit union in another state, which has no branches in your state, is quite often enough to make your money too difficult to find. The judgment creditor would have to get the judgment approved in anther state to garnish it there. More legal expenses for them. 

 

As someone else wrote above, the creditor doesn't send a levy to every bank in the USA. And you will have plenty of notice prior to a debtors exam to spend your money or convert to cash.

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In my state a bank levy application to the court costs $125 and it is only good once. You should always sign up for efiling with email notification; that way you see when the application is applied for and you can make sure there is nothing to get. They get tired of that pretty quick if they have to keep paying those fees.

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23 hours ago, RocketGoBoom said:

 

That is very true. You can go into a debtors exam, be completely truthful about where your money is at that moment, then right after the exam goto the bank and take all of the money out in the form of cash.

 

Even if they are quick, it will take them a few days to get the bank to freeze the money.

 

Like everything else with lawyers, it costs the judgment creditor money to get a lawyer to perform a debtors exam. That is why it is so rare. 

 

Opening an account with a credit union in another state, which has no branches in your state, is quite often enough to make your money too difficult to find. The judgment creditor would have to get the judgment approved in anther state to garnish it there. More legal expenses for them.

 

As someone else wrote above, the creditor doesn't send a levy to every bank in the USA. And you will have plenty of notice prior to a debtors exam to spend your money or convert to cash.

Correct and great information, especially if one is living and in a pinch on funds.

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