Tenants by Entireties Exemption From Federal Criminal Restitution

When a court finds that a client has improperly taken money from consumers or investors in violation of federal or state laws the court may order restitution to the “victims” . Restitution orders require the debtor to pay money to the government agency on behalf of the victims. Ordinary asset protection may not protect against restitution. Continue reading

Does Asset Appreciation After A Fraudulent Transfer Affect Transferee?

The fraudulent transfer statutes give the creditor the right to sue the transferee for the value of the asset transferred. A creditor may get a judgment against the initial transferee who receives the asset. One of my clients asked me whether an increase in value of the asset after the transfer leaves the transferee liable for increased damages. Does the transferee’s liability increase as the asset appreciates in value? Continue reading

Court Says Company Issuance of New Stock To Dilute Debtor’s Shares is Fraudulent Transfer

A creditor may have the Sheriff levy upon stock in a corporation held in the debtor’s name. One debtor thought he could effectively protect his stock by causing the corporation to issues substantial amounts of new stock to his wife for a nominal amount of money thereby diluting and devaluing the stock he owned subject to levy. Continue reading

Exemption Waiver Not Applicable To Tenants By Entireties Protection

One of clients borrowed money from a private lender at high interest rates and very strict repayment terms. The loan documents included a provision stating that in the event of a loan default and a money judgment for repayment that the borrower waived all applicable exemptions from levy under Florida law. Most of the borrower’s assets were owned by his non-debtor spouse jointly as tenants by entireties. The client wanted to know if the waiver of exemptions would be enforceable against his entireties property. Continue reading

Can You Avoid Lawsuit By Hiding From Process Server?

Many people believe they can indefinitely delay a lawsuit against them by avoiding the process server who is trying to serve the complaint. They plan to live somewhere other than their primary residence, often in locations outside of Florida. Can you avoid a lawsuit by making it impossible for a process server to find you and deliver the complaint. Continue reading

Utah Enacts Favorable Asset Protection Trust Statute

Only a few states have enacted asset protection trust legislation to provide creditor protection through a self-settled irrevocable trust. Those states with domestic asset protection trust (DAPT) statutes compete with one another by maintaining laws that attract investment assets to their state from people seeking asset protection benefits. In 2013, Utah enacted a revised domestic asset protection trust statute that includes many attractive creditor protection features. Continue reading

Other States Permit Punitive Damages For Fraudulent Transfers

When first faced with the possibility of being sued many people’s first reaction is to transfer their assets to someone else or to a legal entity. A common question is whether such a transfer later found to be a fraudulent conveyance may increase the debtor’s liability for money damages. The answer depends upon where the debtor resides.

Florida courts have held that a creditor’s fraudulent transfer remedies do not include an award of additional damages against the debtor. Florida courts describe a fraudulent transfer action as being against the transferee of the debtor’s property to recover the property or the property’s value, but not as an action to compound damage awards against the debtor. There is a general principal of Florida law that a creditor may not recover twice for the same harm suffered as a result of the debtor’s initial tort or contract breach. Continue reading

Non-Resident Eligibility For Head of Household Garnishment Exemption

A South Carolina attorney called me to discuss a wage garnishment against his client in Florida. The client was a resident of South Carolina who was temporarily living and working in Florida. The attorney wanted to know if he could dissolve the garnishment because his client qualified for Florida’s head of household exemption from wage garnishment. Continue reading

Selection of Joint Tenancy Does Not Overcome Presumption of Entireties Ownership

One of my clients asked me to review his applications and titling of his financial accounts to make sure he properly registered his accounts as tenants by entireties. In Florida, a joint marital account with rights of survivorship is presumed to be held as tenants by entireties unless the debtor has shown his intent to disclaim entireties ownership in favor of another form of joint title. Continue reading

Court Denies Garnishment of Member’s LLC Distributions

A writ of garnishment is a collection tool that gives the judgment creditor the right to collect a debt owed to the debtor. In a Florida appellate case decided earlier this year a judgment creditor convinced a trial court to issue a writ of garnishment against a limited liability company to garnish distributions that the LLC owed to the judgment debtor by virtue of his membership interest. Continue reading