Fraudulent Conversion of Money To Homestead in Chapter 7 Bankruptcy

Bankruptcy is very hard on wealthy debtors. In a Florida Chapter 7 bankruptcy case decided last month (March) a bankruptcy court applied the 10 year look-back provided for in Section 522 of the U.S.  Bankruptcy Code to deny a homestead exemption because the court found that the home was purchased with the intent to defraud creditors. Continue reading

Is Debtor’s Copyright Exposed to Execution of Civil Judgement?

A client has a new tech company with what he describes as a valuable copyright. His ex-partner sued him in Virginia federal court and obtained a large judgment which the ex-partner domesticated in Florida. The creditor registered a judgment lien with the Secretary of State. The client is concerned that the lien attaches to the copyright and that the creditor will take the copyright to satisfy the judgement. Continue reading

Head of Household Wage Garnishment Exemption For Non-Resident Debtor

Florida Statute 222.11 prohibits a creditor from garnishing the earnings of a debtor who qualifies as head of household. Florida residents working in another state are unable to enforce this garnishment exemptions in foreign state courts because the law does not permit debtors to export Florida’s exemptions. But, is the reverse also true? Can the resident of a foreign state assert a head of household garnishment exemption in a Florida wage garnishment proceeding? Continue reading

Florida Court Lacks Jurisdiction To Seize Foreign Checking Account In Forfeiture Action

I have known clients who have opened bank accounts in other states where garnishments are more difficult. These clients have asked me whether a Florida court could issue an order garnishing the account or imposing another order concerning money in out-of-state (foreign) financial accounts. An appellate decision issued last year suggest that Florida courts lack authority to affect foreign state financial accounts. Continue reading

Florida Court Finds Jurisdiction Over Offshore LLC Membership Interest

An important rationale for offshore asset protection is effecting the removal of the debtor’s asset beyond the jurisdiction of U.S. courts. For example, people choose to form LLCs outside the U.S. because they believe a U.S. court would not have jurisdiction over the debtor’s membership interest in order to impose a charging lien. That theory was rejected in a recent decision by a federal court in Florida. Continue reading

Disadvantage of Foreign Residents Owning Florida Real Estate In Entity Name

Married residents of Iowa purchased an investment motel in Florida through their family corporation. They own all the stock in the corporation jointly. A lawsuit was filed against the husband related to a prior investment. Their Iowa attorney told them that the Florida hotel is exempt because it is Florida real estate owned by them jointly as tenants by entireties. Continue reading

Using Annuity To Protect Trust Distributions To Judgment Debtor

An attorney called me to ask about his client who is facing a large civil judgment. The debtor/client is one of three children who is a beneficiary of an irrevocable trust established by a parent. The parent died. The trust agreement provides that after the parents death the trust is allocated into separate trust shares foe each of the three children, and trust agreement requires quarterly distributions to the heirs of all income in their trust share. The attorney wanted to know if something could be done to protect the income distributions from the client’s judgment. Continue reading

Bonus Not Exempt If Based Upon Company Profits

A client’s professional association compensated all of the owners through a combination of fixed salary and bonuses. The firm made no profit distributions. Bonuses were distributed quarterly by vote of the partners, and amounts were based upon available cash flow. The client asked if all the compensation is exempt as wages if the client is head of household. Continue reading