Most people keep significant sums of money in checking, savings, or money market bank accounts at various financial institutions. However, if you owe a debt, one of the first places that a creditor will look is at your bank accounts. A creditor with a judgment against you for a debt can take steps to garnish the funds in your bank account. Therefore, you need to know what types of bank accounts have protection from creditors.
You can rely on a Florida asset protection lawyer at Kramer Green to work diligently to protect your bank accounts and other assets from creditors to the greatest extent possible. Setting up protected bank accounts is one way to shelter assets from creditors so you can keep the wealth you have earned. You will find at least three types of bank accounts that have protection from creditors.
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Exempt Bank Accounts – Tenants by the Entireties
Under Florida Statutes § 655.79, bank accounts owned jointly by married couples or by tenants by the entireties are exempt from garnishment of a judgment creditor of either spouse. However, note that if the spouses jointly owe the debt, the bank account proceeds are not exempt; in this situation, the creditor can garnish the bank account to satisfy the debt. For the account to remain exempt, one spouse must solely owe the debt.
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Open a Bank Account Elsewhere – Bank Accounts in Other States or Countries
Some state laws do not allow the garnishment of bank accounts containing only small amounts of money. Other state laws do not permit the garnishment of bank accounts; however, those banks may only accept residents of those states as account holders. Therefore, you may find it somewhat challenging to locate a state where you can maintain an account free from garnishment and remain a Florida resident.
Although offshore accounts are not technically exempt from garnishment, they are extremely challenging and expensive for creditors to reach. Typically, creditors find it prohibitively difficult to try and assert jurisdiction over the funds in offshore accounts.
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Protected Bank Accounts – Wages, Government Benefits, and Other Exempt Funds
If funds in a bank account are legally protected in some way, creditors cannot garnish those funds. For instance, under Florida Statutes § 222.11, creditors cannot garnish the wages of the head of household. Likewise, government benefits are exempt (subject to limitations) from garnishment by most creditors. These benefits include Social Security Disability and Retirement, Supplemental Security Income, short or long-term disability, most pensions, and VA benefits. In addition, child support that you receive for your children is exempt from garnishment.
Some exceptions exist to these general garnishment rules if you owe certain debts, such as federal taxes, federal student loans, or child support debts. Furthermore, it is easiest to protect these funds if you keep all protected funds in the same account and do not mix them with non-protected funds. Doing so allows you to more clearly trace the funds from their sources and prove that the account consists solely of exempt funds.
Allow Us to Help You Protect Your Assets Today
The asset protection attorneys of Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. are ready to assist you in protecting your business from the wrongful actions of current or former employees, including enforcing your rights under the Florida Uniform Trade Secrets Act. We know how hard you have worked to build your business and want to help you preserve it.
As a result, our objective is to take any actions necessary to protect your business for your and your family’s benefit. Contact our office today at (954) 966-2112 or reach out to us online to schedule a time to discuss your legal issues with our attorneys.