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I want to legally and ethically shield my assets from Creditors. What is the best way to do so?

Chicago, IL |
Filed under: Debt

I believe a judgment will be taken against me in the next year. I want to shield as much as my assets as possible from creditors. If I start moving my assets into my wife's name (Car, bank accounts, etc.) are they shielded from creditors? What is the best way to protect my assets from a creditor in a non community property state? I wish someone would publish a step by step legal guide on this.....

Attorney Answers 4

Posted

Better read 740 ILCS 160 first, otherwise known as Illinois' Uniform Fraudulent Transfer Act. After you do that, talk to an attorney that handles debtors rights in your area.

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Posted

How could that be ethical?

We do not have a client/attorney relationship until you make an appointment, we discuss your case face to face, I accept a retainer, and we explictly agree to enter into representation.

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Posted

There is nothing unethical about protecting your assets to the fullest extent of the law. The laws were passed to provide you with protection. As the first attorney stated, find an attorney that focuses on Bankruptcy or debt collection. They could help you "plan" properly. Huge corporations and the rich do this all of the time. You just want to make sure you protect yourself in time to prevent any appearance of fraud.

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Marc Gregory Wagman

Marc Gregory Wagman

Posted

This is dangerous advice to give a client or prospective client considering the Uniform Fraudulent Transfer Act. It is one thing to protect assets if possible but quite another to transfer everything to your wife once a creditor is already out there for no value. That is not asset protection it is a fraudulent transfer which can be undone by the creditor and huge no no in bankruptcy.

Jeffrey Scott Hyslip

Jeffrey Scott Hyslip

Posted

I didn't give any advice whatsoever - certainly not to a client or a prospective client. My "unethical" remark was in reference to a previous answer. I simply advised the consumer to find an attorney to help him "plan" or as you reference "protect his assets". Once the attorney was retained I was assuming that the competent attorney would consider all relevant laws when providing the "asset protection plan".

James P. Frederick

James P. Frederick

Posted

I understood Attorney Hyslip's response in the spirit he intended. The emphasis should be placed on the "protecting your assets to the extent of the law." This is no different than taking available tax deductions or planning for Medicaid qualification. A legal technique is, by definition, NOT a fraudulent transfer. Of course, this should not even be attempted without the advice of legal counsel, which is what Attorney Hyslip advised. I agree with Attorney Wagman, however, that asker's original question expresses a desire to "legally and ethically act" and then provides an unlawful suggestion. That is why legal counsel is critical.

Marc Gregory Wagman

Marc Gregory Wagman

Posted

Transferring after a person has the debt out there is the problem. Doing it before a debt is out there is the difference. I agree that Mr. Hylsips answer is somewhat correct, but the problem is that this person is trying to hide assets now in anticipation of a lawsuit. Of course the person needs to speak with an attorney, and some may give bad advice in this situation.

James P. Frederick

James P. Frederick

Posted

Sadly, you are probably right about that!

Posted

What you are trying to do is a fraudulent transfer. A fraudulent transfer is transferring assets to another person for little or no value in order to shield it from creditors. The Uniform Fraudulent Transfer Act is in Illinois as almost every state and transferring assets does not shield assets from creditors if you file bankruptcy certainly and the creditor can argue it in state court as well.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Illinois. Responses are answers to general legal questions and the receiver of such question should consult a local attorney for specific answers to questions.

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Marc Gregory Wagman

Marc Gregory Wagman

Posted

I wanted to explain a little more. Once you have a creditor a large debt there is little you can do to shield or transfer assets from the creditor without it being a fraudulent transfer. When you want to protect property from creditors you must do it before you have debt. I.E. when you buy a home for example you place it in trust then before you have any equity or debt. Now that you have a huge debt and potential liability there is no method for ethically transferring or hiding assets

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