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Make yourself judgment proof Florida?

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Make yourself judgment proof Florida?
Once a creditor has a judgment against you they have several options available to them to "execute" that judgment. The two quickest and most widely used forms are the attachment or "levy" of checking accounts and wages.

If a judgment creditor (JC) locates a bank account with your name on it they can very easily attach it. It does not matter if the account is in just your name OR if it is a joint account in your name AND another persons name.

The only way to get a bullet proof checking account is to form an LLC (Limited Liability Company) with Florida State. I recommend setting up a mail drop at a place like the UPS Store or Mail Boxes Etc and use this newly acquired address to setup your LLC under.

Once you have done this and have your organization documents (usually within 24 hours) You will need to create a FEIN tax ID number. This is free and can be done at https://sa.www4.irs.gov/modiein/individual/index.jsp and will be given instantly.

Now that you have LLC organization papers and an FEIN you can open a commercial checking account at any bank with yourself as a "signor" on the account. This checking account will be quite safe from any JC.

Wage garnishment is widely used in FL by JC's. By Law, the most a JC can garnish is 25% of your paycheck however, IF you are "head of household" in the State of Florida, your wages are EXEMPT from garnishment which means a JC CANNOT garnish your wages. You must file an affidavit with the court to declare your head of family status and protect your wages from being taken. Persons who do not qualify as head of family will still have the protection of federal law which limits the amount of wages that can be garnished. If you take home less than 30 times the minimum wage per week, all of your wages are exempt. Otherwise, a judgment creditor can obtain 25 percent of your net wages under a continuing writ of garnishment until the judgment is paid in full.

Your vehicle - your interest in a vehicle is exempt up to $1,000 of its value. This means that your vehicle cannot be taken to satisfy a judgment unless the value of the car, less all debts for which the vehicle is collateral, is greater than $1,000. If a judgment creditor or sheriff takes your vehicle under an execution and its value to you is $1,000 or less, you can apply to the court for recognition of your exemption and request the return of your vehicle. Your affidavit of exemption should be filed with the court and the sheriff.

It is very rare for a JC to pursue personal property in Florida as it usually is more trouble than its worth. Now if you have a 30k vehicle owned free and clear it may be a different story. You could take a vehicle and sell it to your LLC and have it titled accordingly. This cost about $270 plus sales tax at the local tag office. If you used a new address and maybe a variation of your name to setup your LLC it is unlikely anyone would ever catch it. There is however a possibility of "fraudulent conveyance" or "fraudulent transfer" which means you with intent, sold or transfered ownership of real property with the intent to hide assets from a JC. This includes transferring the title to your spouse or to a family member and such transfers can be challenged in court if the JC wants you bad enough.

Most Creditors (with the exception of Capital One) will not sue you unless they think they will get their money back. Many will do an asset search beforehand to see what you have. If you show little or no assets then chances are (unless the creditor is Cap One) they will not throw good money after bad.

Problem with judgments are, they are good for a LONG time. 10 years and THEN they can be RENEWED for another 10 years. Judgments tend to come back and bite you when you LEAST expect it so plan for the long haul if you are going to have a judgment granted against you. See if you can get your employer to pay your newly formed LLC instead of paying you directly. there are benefits to both parties should they entertain the aspect.
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