Asset protection is a set of legal techniques and a body of statutory and common law dealing with lawfully protecting assets of individuals and business entities from civil money judgments. The goal of all lawful asset protection planning is to lawfully insulate as much as possible assets from claims of creditors without concealment or tax evasion. If you have run up against this issue in your attempt to collect a judgment, your next steps must be strategic and carefully thought out.
Generally speaking, there are only a few types of asset protection that do not run afoul of the California Penal Code or the Uniform Fraudulent Transfer Act ("UFTA"). These allowable types of asset protection include:
· planning with spendthrift trusts pursuant to California Probate Code Section 15301, et seq., and
· general corporate and partnership planning.
This means that in many other instances, if asset protection is in response to a creditor's claim (whether present or future) it is possible voidable under the UFTA. Further, if the transfer occurred after the existence of a debt, it can also be a crime under California Penal Code Section 155. If the debt is reduced to judgment, then it is a crime under California Penal Code Section 154.
While it may be crime, these types of crimes are, unfortunately, rarely prosecuted. In fact, the last reported criminal case in this area was in 1923. What does this mean for the creditor? When dealing with the types of transfers that avoid the collection of outstanding judgments, a creditor must look to an experienced collections attorney to right the wrong. There are ways to do it.
For more information on how to collect a judgment against a debtor claiming asset protection, contact Los Angeles commercial collections attorney Ronald P. Slates today.