CanI protect my money from creditorsby opening up an out-of-state bank account?

UPDATED: Jul 14, 2010

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CanI protect my money from creditorsby opening up an out-of-state bank account?

I was issued a citation to discover assets and my bank account was frozen (no money there). I have opened an out of state account. Can they get to that?

Asked on July 14, 2010 under Bankruptcy Law, Illinois


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Unfortuantely, yes: creditors can reach out-of-state bank accounts. In terms of discovery, an out-of-state bank may very well have to comply with an order from your state's courts or in a legal proceeding your state, if there is any nexus or relationship between the bank and your state (e.g. it also has branches in, does business in, or is cowned by a bank or company doing business in, your state). Second, if there are interrogotories or other discovery requests served on you to discover your assets, you have to answer them fully and truthfully, regardless of whether the money is. If you fail to do so and your failure is discovered, you could face additional liability.

Creditors can even garnish or otherwise reach assets in an out-of-state bank. To do so, they will need to go to the other state's courts, bringing with them a judgment in your favor from your state; the other state's courts will honor or enforce that judgment.

So moving assets to an out-of-state bank may make it a little more expensive or awkward for creditors to reach them, but does not necessarily provide any real protection.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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