Proceedings Supplementary Extend Statute of Limitations For Fraudulent Transfers

The statute of limitations for creditors’ fraudulent transfer actions is four years. However, a recent Florida case holds that the four year limit does not apply to fraudulent transfer claims brought in the context of Proceedings Supplementary. Creditors can challenge transfers at any time during the 20 year life of a civil judgment. Continue reading

Self-Directed Retirement Plan Exposed Through Business Dealings With Third Party

Occasionally I get phone calls about buying or titling investment assets in the a client’s retirement plan. There are rules that permit self-directed IRAs or self-directed 401ks to purchase income producing investments such as rental property or businesses. The details of self-directed retirement plans are beyond by expertise; this is mostly a tax law issue. I understand which someone may want to used a self-directed retirement to defer investment income, but as I saw last week, the plan can backfire causing losses far in excess of tax savings. Continue reading

Spending or Gambling Cash Not Excuse For Non-Compliance with Court Order

I cannot recall how many times a client has suggested protecting cash from a creditor or a bankruptcy trustee by withdrawing the cash from his bank account and then telling the creditor, judge, or bankruptcy trustee that the cash was spent or lost at the casino. The problem is that judges do not find debtor’s stories to be credible. Courts will impose contempt citation if the debtor cannot produce the cash or a much better explanation of why it is impossible to find and turn over the money. Continue reading

Time Limit For Second Mortgage Lender To Sue After Foreclosure Sale

As of July 1, 2013, the statute of limitations within which a bank may seek a deficiency judgment was reduced from five years to one year for residential properties with no more than four dwelling units. An attorney called me last week and asked whether the one year time limit applies to suits brought a second mortgage holder following a deficiency action brought by the first mortgage. Continue reading

Planning To Avoid Federal Court Jurisdiction Over Fraudulent Transfers

Another attorney told me about his  Florida client anticipating a lawsuit by a creditor located in a foreign state (outside Florida) considers forming an LLC and conveying assets out of the debtor’s name to the LLC . The client accepts the risk that a creditor may challenge the conveyance as a fraudulent transfer. The attorney asked me wither his client should form the LLC in the foreign state where the creditor had his headquarters or primary place of business. Continue reading

Head of Household Exemption Not Applicable When Employer Located Outside Florida

An individual creditor emailed me seeking advice about garnishing wages of the debtor who now resided in Florida. The creditor got a judgment from an Indiana court when the creditor and debtor both lived in Indiana. The debtor since relocated in Florida. The question was whether the debtor can assert Florida’s head of household exemption from wage garnishment. Continue reading

Which State Has Jurisdiction Over Fraudulent Transfer Action?

A creditor considering a fraudulent transfer action against a debtor’s transfer of real estate has to consider where to file the lawsuit. The issue becomes interesting when the debtor, the debtor’s property, and the recipient (transferee) of the property are each located in a different state, or if all in Florida, different Florida counties. Continue reading

Multi-Member Ownership of Florida Accounting Business

An accountant was starting a new tax practice in Florida. I suggested he form a professional LLC to be owned by the accountant and at least one other person.. The accountant stated that he did not think anyone other than a licensed accountant could own any part of his business. I suggested he confirm his assumption with the agency that regulates accounting practice in Florida. Continue reading

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