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John, Attorney
Category: Legal
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Experience:  Licensed and practicing attorney.
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money judgment against me that I am appealing.

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There is a money judgment against me that I am appealing. The creditor has not attempted to collect at this time. I am 59 years of age and just lost my job and may receive a relatively large severance package. If I place the severance monies into a retirement annuity, I currently am trying to catch up with retirement savings and this money would be helpful. If I lose the appeal and the creditor attempts to collect on the judgment would the creditor be able to get at the severance money that i placed in the annuity?

Hi, thanks for submitting your question today. This would give you some protection of those funds transferred to the annuity. However, contributions made within the last five years are exempt only to the extent that the contributions did not exceed 7% of the individual's income over the five-year period. So the money you put in this annuity would only be protected up to 7% of your income during the last 5 years. Mass Gen Law Ch 235. 34A

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Customer: replied 4 years ago.
Thanks for your reply if the annuity is located in New York or if I moved to New York, I am originally from ny. Would New York laws apply and would they be more protective.

Is there any other way that I can protect the monies?

Thanks again
Hi, thanks for your reply. Because you already have the judgment in Mass. and you are a resident of Mass, the plaintiff would attach assets under Mass law. If you could somehow find an annuity issuer that that only has offices in NY, you may put the creditor through the extra step of having to "perfect" the judgment in NY, and NY doesexempt annuity income from execution. I have no idea how you'll find a company like that.

You're going to have a difficult time exempting assets by transferring assets to avoid collection. This is because there are laws of "fraudulent transfer". What this means is when an asset is moved or purchased just to avoid a debt, the courts allow the creditor to go after those assets in any event. But, in any event what you could do is conform your assets to the exemptions of either state. There are too many to list, but here re the statutes of NY and Mass.
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