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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15831
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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how can i hide money from bankrupcy trustee

Resolved Question:

how can i hide money from bankrupcy trustee
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 1 year ago.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on.

WALLSTREETESQ :

It is against Federal law to hide money from a trustee when you are filing a bankruptcy, what you should do is before you file bankruptcy convert your non exempt cask or assets into exempt items, such as an IRA exempt furniture, or other items.

Customer:

how about a trust for my kids


 

WALLSTREETESQ :

A trust for your kids will be difficult, unless your state exempts them,

WALLSTREETESQ :

Texas is one of the most liberal exemption states. Discussed below are the personal property bankruptcy exemptions available under Texas state law and the most commonly claimed federal law exemptions.
The state personal property exemption cap: The Texas debtor is allowed a certain portion of personal property exempt from garnishment, attachment, etc. The aggregate amount which is allowed the debtor is determined based upon the debtor's status.


Single adult: A single adult, who is not a member of a family is entitled to property he or she owns that has a fair market value (exclusive of liens) of up to $30,000. Tex.Prop. Code § 42.001(a)(2).


Family: A family is entitled to property with a fair market value (exclusive of liens) of up to $60,000. Tex.Prop. Code § 42.001(a)(1).


Property subject to state exemption cap: With the exception of jewelry and unpaid commissions for personal services which are each limited to 25% of the cap, the debtor may allocate his exemption cap among any one or more of the 13 categories listed below.

Home furnishings: Home furnishings, including family heirlooms can be claimed as exempt property. Tex.Prop. Code § 42.002(a)(1). The term "home furnishings" is not defined in the Texas Property Code. The words "household" and "furnishings" are given their ordinary meaning. They do not include items such as portable telephones and hand-held recorders.

Food: Provisions for consumption can be claimed as exempt property.

Farm/ranch vehicles and implements: Farming and ranching vehicles and implements can be claimed as exempt property.

Tools of trade: Tools, equipment, books and apparatus, including boats and motor vehicles used in a trade or profession can be claimed as exempt property. Tex.Prop. Code § 42.002(a)(4). What constitutes "tools of trade": Items are tools of the trade in Texas if they are "fairly belonging to or usable in the trade." Only items that are "peculiarly adapted to" the debtor's trade or profession are exempt as tools of the trade under the Texas exemption statutes.



Wearing apparel: Wearing apparel (other than jewelry which is dealt with separately) can be claimed as exempt property. Tex.Prop. Code § 42.002(a)(5).

Jewelry: Jewelry is exempt to the extent its value does not exceed 25% of the exemption limit. Tex.Prop. Code § 42.002(a)(6).

Weapons: Two firearms can be claimed as exempt property. Tex.Prop. Code § 42.002(a)(7).

Athletic/sporting equipment: Athletic and sporting equipment, including bicycles can be claimed as exempt property. Tex.Prop. Code § 42.002(a)(8). Athletic and sporting equipment consists only of small items for individual use and does not include jet skis, sailboats, or power boats. In re Crockett, 158 F.3d 332 (5th Cir.1998)(jet skis); In re Gibson, 69 B.R. 534, 535 (Bankr.N.D.Tex.1987) (power boats); In re Griffin, 139 B.R. 415, 417 (Bankr.W.D.Tex.1992) (sailboats).

Motor vehicles: A two-wheeled, three-wheeled, or four-wheeled motor vehicle for each member of a family or single adult who holds a driver's license or who does not hold a driver's license but who relies on another person to operate the vehicle for the benefit of the nonlicensed person can be claimed as exempt property. Tex.Prop. Code § 42.002(a)(9).

Farm animals: The following animals and forage on hand for their consumption can be claimed as exempt property: two horses, mules, or donkeys and a saddle, blanket, and bridle for each; 12 head of cattle; 60 head of other types of livestock; and 120 fowl. Tex.Prop. Code § 42.002(a)(10).

Pets: Household pets can be claimed as exempt property. Tex.Prop. Code § 42.002(a)(11).

Life insurance: The present value of life insurance policies are exempt if a family member or dependent of the insured judgment debtor is the beneficiary. Tex.Prop. Code § 42.002(a)(12); but see Tex.Ins. Code art. 21.22, which indicates that exemption is unlimited (§ 11:45).: As a practical matter, the cash surrender or loan value of a whole-life insurance policy is its present value and there will be no present value to a term policy. (See § 11:45 et seq.)

Unpaid commissions for personal services: Unpaid commissions for personal services not to exceed 25% of the aggregate limitation may be claimed as exempt from seizure. Tex.Prop. Code § 42.001(d).

State exemptions not subject to cap: Certain exemptions are not subject to any valuation limitation.

Current wages: Current wages for personal services are wholly exempt, except for the enforcement of court-ordered child support payments. Tex.Prop. Code § 42.001(b); See In re Cooley, 87 B.R. 432, 438 (Bankr.S.D.Tex.1988)--Bankruptcy Code also excludes wages from Chapter 11 plan.

Limited protection: This exemption prohibits the issuance of a writ of garnishment against the debtor's employer. Additionally, a court cannot order turnover of paychecks, retirement checks and other similar types of assets. However, once the wages are turned over to the debtor and converted into cash they are subject to execution and a turnover order. Tex.Civ.Prac. & Rem. Code § 31.002(f)--a turnover order cannot be obtained before the wages are turned over to the debtor; Brink v. Ayre, 855 S.W.2d 44, 45 (Tex.App.--Houston [14th Dist.] 1993, no writ); Burns v. Miller, Hiersche, Martens & Hayward, P.C., 948 S.W.2d 317 (Tex.App.-- Dallas 1997, writ denied).: If the wages are deposited into a bank account they are subject to garnishment. American Exp. Travel Related Services v. Harris, 831 S.W.2d 531, 533 (Tex.App.--Houston [14th Dist.] 1992).

Self-employed debtors: The current wages exemption does not apply to the earnings of self-employed debtors who are viewed as independent contractors. Tex.Prop. Code § 42.001(d); In re Martin, 117 B.R. 243, 246 (Bankr.N.D.Tex.1990). The self-employed debtor must rely upon the exemption for unpaid commissions for personal services which is included in the property subject to the exemption cap and cannot exceed 25% of the cap.
EXAMPLES: Texas courts have found independent contractors to include:
. attorneys in private practice; Hennigan v. Hennigan, 666 S.W.2d 322, 324-25 (Tex.App.--Houston [14th Dist.] 1984, writ refused n.r.e.), 677 S.W.2d 495 (Tex.1984);
. a district agent for an insurance company; In re Perciavalle, 92 B.R. 688, 691 (Bankr.W.D.Tex.1988), and a trucker who furnished his own transportation, equipment, etc. Brasher v. Carnation Co. of Texas, 92 S.W.2d 573, 575 (Tex.Civ.App.-- Austin 1936, writ dismissed).

Health aids: Health aids that are professionally prescribed for the judgment debtor (or the debtor's spouse or dependent) are exempt regardless of value. Tex.Prop. Code § 42.001(b)(2).: This exemption arguably includes, e.g. a wheelchair for a person unable to walk, an air conditioner for an asthmatic or an elevator for a person unable to climb stairs. However, it probably does not exempt swimming pools, saunas, bicycles, golf clubs, or gymnastic equipment merely because their use is necessary to sustain good health.

Insurance benefits: There is an unlimited exemption of insurance benefits to the debtor who is the designated beneficiary of an insurance policy. Tex.Ins. Code art. 21.22; In re Young, 166 B.R. 854, 857 (Bankr.E.D.Tex.1994) (life insurance proceeds remain exempt cash).: "Insurance benefits" includes "all money or benefits of any kind, including policy proceeds and cash values, to be paid or rendered to the insured or any beneficiary under any policy of insurance issued by a life, health or accident insurance company, including mutual and fraternal insurance companies, or under any plan or program of annuities and benefits in use by any employer." Tex.Ins. Code art. 21.22 § 1.: The exemption protects the insurance benefits from seizure to pay the debts of the beneficiary and the insured even if (i) the insured has the right to change the beneficiary or (ii) the insured or the insured's estate is a contingent beneficiary. Tex.Ins. Code art. 21.22.: This exemption does not apply to a creditor seeking to:(1) recover premium payments made in fraud of creditors; or (2) to foreclose on its security interest in a policy or its proceeds pledged to secure the debt of the insured or beneficiary. Tex.Ins. Code art. 21.22. If the bankruptcy debtor chooses the Texas exemptions, insurance benefits are fully exempt in a bankruptcy proceeding of either the insured or the beneficiary. Tex.Ins. Code art. 21.22, § 1(4).

Retirement plans, IRAs, etc.: There is also an unlimited exemption for monies set aside in certain qualified accounts earmarked for the debtor's retirement.

Retirement plans; profit sharing plans: A person's right to the assets held in or to receive payments, whether vested or not, under any stock bonus, pension, profit-sharing, or similar plan, and under any annuity or similar contract purchased with assets distributed from that type of plan, and under any retirement annuity or account described by Section 403(b) of the Internal Revenue Code of 1986, or any individual retirement annuity, including a simplified employee pension plan, is exempt from attachment, execution, and seizure for the satisfaction of debts. The plan, contract, or account must qualify under the applicable provisions of the Internal Revenue Code of 1986. (26 U.S.C.A. § 1 et seq.) Tex.Prop. Code § 42.0021(a); Rucker v. Rucker, 810 S.W.2d 793, 795- 96 (Tex.App.--Houston [14th Dist.] 1991, writ denied)--to be exempt plan must qualify under Internal Revenue Code.: This does not prohibit the participant/plan beneficiary from borrowing from his or her plan and granting a lien on his/her interest in the plan to secure the loan. Tex.Prop. Code § 42.002(d).: Additionally, under Texas law, causes of action to recover for lost exempt status of an individual retirement account (IRA) lost allegedly due to negligence and breach of fiduciary duty by the company that administered the debtor's preconversion Keogh retirement plan are exempt property under Texas statute exempting qualified retirement accounts from bankruptcy estate. Matter of Swift, 129 F.3d 792, 801 (5th Cir.1997).

Government or church plans: A person's right to the assets held in or to receive payments, whether vested or not, under a government or church plan or contract is also exempt. The plan or contract must qualify under the definition of a government or church plan under the applicable provisions of the federal Employee Retirement Income Security Act of 1974. Tex.Prop. Code § 42.0021(a); 26 U.S.C.A. § 1001 et seq.: The participant/plan beneficiary is not prohibited from borrowing from his or her plan and granting a voluntary lien on his/her interest in the plan to secure the loan. Tex.Prop. Code § 42.002(d).

IRA [and Keogh] ("self-employed") plans partially exempt: Contributions to IRAs and annuities are exempt to the extent those amounts do not represent contributions in excess of the maximum contribution amounts exempt from federal income tax. Accrued earnings on exempt contributions are also exempt. Excess contributions and accrued earnings thereon are not exempt. Tex.Prop. Code § 42.0021(b).

Nontaxable rollover contributions: If an IRA contains amounts which qualify as non-taxable rollover contributions under the Internal Revenue Code, the amounts are exempt. 26 U.S.C.A. §§ 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3); Tex.Prop. Code § 42.0021(b).

Multiple accounts: Texas law does not limit the number of IRAs the debtor can claim as exempt property; provided, the aggregate amount does not exceed the maximum contribution amounts. Matter of Volpe, 943 F.2d 1451, 1453 (5th Cir.1991). Distributions: Once payments are received by the retiree or other beneficiary they are no longer exempt. Cain v. Cain, 746 S.W.2d 861, 865 (Tex.App.--El Paso 1988, writ denied). There is an exception to this rule for amounts distributed from a qualified plan. These amounts are exempt for 60 days if the amounts qualify as a nontaxable rollover contribution. Tex.Prop. Code § 42.0021(e). EXAMPLE: Debtor is terminated by employer. Employee "cashes out" debtor from employer's qualified plan. Debtor has 60 days to deposit funds into another qualified plan. Texas Exemption of Retirement Benefits: Interaction with the Bankruptcy Code and Possible Preemption by Mackey v. Lanier Collections Agency & Services." 26 Houston L. Rev. 497 (1989) contains a good discussion of the bankruptcy issues in exempting retirement benefits.

Federal non-bankruptcy exemptions: A debtor may also utilize any exemptions provided by federal nonbankruptcy law in addition to either the state exemptions or the Bankruptcy Code exemptions.

Social security benefits: Under federal law Social Security benefits (whether paid or payable) are not subject to execution, levy, attachment, garnishment, legal process or to the operation of the bankruptcy laws. 42 U.S.C.A. § 407.

Veteran's benefits: Federal law generally exempts veteran's benefits from seizure, both before and after receipt by the beneficiary. 38 U.S.C.A. § 3101(a).: But if the benefits are spent on a permanent investment, they are no longer exempt as "veteran's benefits." Carrier v. Bryant, 306 U.S. 545, 549-550, 59 S.Ct. 707, 708, 83 L.Ed. 976 (1939). And, once benefits are paid to the veteran, they may be reached by court order to satisfy the veteran's child support obligations. Rose v. Rose, 481 U.S. 619, 635, 107 S.Ct. 2029, 2039, 95 L.Ed.2d 599 (1987).

Property of debtor in military service: Although not technically an exemption from seizure, federal law also provides that any court may stay enforcement against a debtor in military service if the ability of the defendant to pay the judgment or debt is "materially affected by reason of his military service." The court may stay execution of any judgment or vacate or stay any attachment or garnishment (before or after judgment). The stay may generally last for the period of the debtor's military service plus three months. The court also has discretion to require payment in installments or otherwise. See 50 U.S.C.A. App. §§ 523, 524.: In addition, deposits made to a U.S. Serviceman's Savings Institution by members of the armed forces on permanent duty outside the United States (and the interest thereon) are exempt from liability for the depositor's debts. 10 U.S.C.A. § 1035(d).

Federal employee's statutory compensation for injury or death: Compensation (and claims for compensation) paid on the death or injury of a federal employee are exempt. Also, these claims cannot be assigned. 5 U.S.C.A. § 8130.

WALLSTREETESQ :

The above is from the TX bankruptcy law, and lists all exemptions available to you.

Customer:

if i invest in a business,(put all cash there)what can they do?

WALLSTREETESQ :

If they find out that it was done with the intent to hide money from your creditors, it can be possible that they force a sale of the business and pay the creditors with the money.

Customer:

thanks

WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15831
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you

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